ECONOMICS

Detailed explanation-1: -Higher interest rates result in higher costs of borrowing money. 4. Rising prices causing lower buying power is referred to as an inflation risk.

Detailed explanation-2: -inflation risk. rising or falling prices cause changes in buying power.

Detailed explanation-3: -What Is Interest Rate Risk? Interest rate risk is the potential for investment losses that can be triggered by a move upward in the prevailing rates for new debt instruments. If interest rates rise, for instance, the value of a bond or other fixed-income investment in the secondary market will decline.

Detailed explanation-4: -For investors, bonds are considered most vulnerable to inflationary risk.

Detailed explanation-5: -The purchasing power of money refers to the amount of goods and services that a dollar can buy. When the price level increases, a dollar buys less good and services.