Income risk

Income risk

The possibility that a portfolio's dividends will decline as a result of falling interest rates. Income risk is generally greatest for money market instruments and short-term bonds, and least for long-term bonds.

Income Risk

The risk that the yield of a fund investing in short-term debt securities will decrease because of a decline in interest rates. For example, suppose a mutual fund invests in money market securities with maturities of less than a year. If interest rates decline, then the yield on the money market fund will also decline because when the money market securities mature, the returns are reinvested at lower interest rates. Income risk is the same concept as interest rate risk, but the former applies to funds, while the latter pertains to individual debt securities.
References in periodicals archive ?
Marjan Nikolov from the Center for Economic Analyses says the Government should also bear in mind the tax income risk indicators.
The paper, "Risky Business: Living Longer Without Income for Life" was developed by the AAA 'Lifetime Income Risk Joint Task Force,' which is indicative of the level of concern regarding the trend.
Income risk - often landlords rely on rental income rather than capital income and therefore this has to be protected 4.
A summary of findings thus far is that default significantly worsens allocations for income risk and preference parameters that are empirically plausible for U.
But there is another type of risk tolerance that is very important for advisors to measure and understand: I call it income risk tolerance (some call it longevity risk tolerance).
In addition, a declining equity glide path with age is appropriate for the worker with low income uncertainty; for the high income risk worker, equity exposure rises until retirement.
has released a study showing that adding a lifetime guaranteed minimum withdrawal benefit to a traditional stock and bond retirement portfolio can increase income while decreasing income risk.
Advisors can answer these questions if they use a formal retirement income risk assessment process.
Other papers cover new measures to improve productivity, country-level production efficiencies, the impact of land fragmentation on rice production, future prospects for grain and means of handling peak demand for it, income risk and acreage in terms of soybeans and corn, commercial crops and grain crops, farmers' insurance, and price behavior in China's wheat futures market.
PEOPLE on a moderate income risk being worse off than the poorest workers in their twilight years, a report out today claims.
If price differentials capture the fundamental discount for risk in share prices, and if abnormal ROE beta and/or the standard deviation of abnormal ROE are reliable surrogates for priced risk factors, then we expect price differentials to increase with residual income risk.
Retail institutions, such as pension funds or insurance companies, could offer people contracts to hedge their aggregate income risk.