The risk that an investor will be forced to place earnings from a loan or security into a lower yielding investment is known as

A. liquidity risk.
B. reinvestment risk.
C. credit risk.
D. foreign exchange risk.
E. off-balance-sheet risk.

Ans: B. reinvestment risk.

Business

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Which of the following accounts has the highest EAR?

A) one that pays 5.4% every six months B) one that pays 1.0% per month C) one that pays 9.6% per year D) one that pays 2.4% every three months

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