Interest-rate risk describes the impact that a change in current interest rates is likely to have on the value of your investment portfolio. You face interest-rate risk when you buy long-term bonds or bond mutual funds whose market value will drop if interest rates increase. That happens because other investors will be able to buy bonds paying the new, higher rate, so they'll be unwilling to pay full price for a bond paying a lower rate of interest.
Barry Goldsmith
| APA | Barry Goldsmith. (2010). interest-rate risk. Retrieved September 23, 2026, from http://smartdefine.org/interest-rate_risk/definitions/1156306 |
| Chicago | Barry Goldsmith. 2010. "interest-rate risk" http://smartdefine.org/interest-rate_risk/definitions/1156306 (accessed September 23, 2026). |
| Harvard | Barry Goldsmith 2010, interest-rate risk, Smart Define, viewed 23 September, 2026, <http://smartdefine.org/interest-rate_risk/definitions/1156306>. |
| MLA | Barry Goldsmith. "interest-rate risk" 21 October 2010. Web. 23 September 2026. <http://smartdefine.org/interest-rate_risk/definitions/1156306> |