163k views
1 vote
In the context of a bond portfolio, price risk and reinvestment rate risk exactly cancel out at a time horizon equal to _____

1 Answer

4 votes

Answer: duration of the portfolio

Step-by-step explanation:

An investment time horizon which is also referred to as the investment horizon is total time that an investor is expected to hold a particular security.

In the context of a bond portfolio, price risk and reinvestment rate risk exactly cancel out at a time horizon equal to duration of the portfolio.

User Shatora
by
7.0k points