If interest rates fall, a bond issuer may decide to pay off (or ''retire'') its debt and issue new bonds that pay a lower rate. When this happens, the fund may not be able to reinvest the proceeds in an investment with a high return or yield. This is an example of:

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Mohammed Meddah · Accepted Answer

Prepayment risk in bond funds

Mohammed Meddah · Answer

Credit risk in bond funds

Mohammed Meddah · Answer

Interest rate risk in bond funds

Mohammed Meddah · Answer

All of these

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Question 597 - CTFA discussion

Suggested answer: B

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