Rate Risk

Posted in Finance, Accounting and Economics Terms, Total Reads: 682
Advertisements

Definition: Rate Risk

The risk associated with an investment as a result of variability of the interest rate associated with the investment is known as rate risk. Both the lender and the borrower face the rate risk if the interest rate associated with an investment is the floating interest rate.

When the interest rate is rising the borrower is facing the rate risk as their liabilities towards the lender are increased. On the other hand if the interest rate is falling then the lender is facing the rate risk as the lenders income from the interest is reduced.

 

Search & Explore : Management Dictionary

Browse definitions and meaning of more concepts and terms similar to Rate Risk. The Management Dictionary covers definitions and overview of over 7000 business concepts from 6 categories.



Share this Page on:

Similar Definitions from same Category: