What is interest rate risk? 2003-12-17 12:07 Updated Source: Xinzhi.com This refers to the risk of loss of interest rates to securities investment. Interest rate changes directly affect the price of financial assets. If interest rate increases produces the following effect: First, the flow of funds is changed. The interest rate is improved, which will attract social funds into indirect financing channels. Due to the large risk of risk, the fund will decrease in the direct financing market, the stock market demand is reduced, the stock price is also falling, the fund price is often down; the second is the company's profit reduction . Interest rate improvement, making the company's loan costs, increased interest burden, profit reduction makes stock prices to decline, causing the price of funds to decline, investors assess stocks and other price securities will rise, thus make stock prices and fund prices Falling together. The interest rate is declining, and the opposite effect is caused to increase the stock price and the fund price.
Article Source: Xinyi Net
