1929. An effect of interest rate risk and investment risk on a bond’s yield is classified as

reinvestment premium
investment risk premium
maturity risk premium
defaulter’s premium
✅ The correct answer is C.
An effect of interest rate risk and investment risk on a bond’s yield is classified as maturity risk premium. A maturity risk premium is the amount of extra return you’ll see on your investment by purchasing a bond with a longer maturity date.

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