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Jul 7, 2022 · Stock volatility, market swings, economic or political events, and regulatory, or interest rate changes affect an investor's tolerance for risk. Age, investment goals, and income...
• Inflation risk is the risk that an asset class or security won’t maintain its purchasing power relative to rising prices in the overall economy. • Interest rate risk is the risk that fixed income owners are exposed to when current interest rates change relative to the interest rate or yield being paid on the investment there are holding.
Sep 22, 2018 · We find robust evidence that people in the low interest rate condition (Group 2) invest significantly more in the risky asset than people in the high interest rate condition (Group 1). The average investment share in the risky asset increases by about 8 percentage points.
- Chen Lian, Yueran Ma, Carmen Wang
- 2019
Sep 1, 2021 · Low and/or negative interest rates can induce greater risk-taking to protect profitability if sticky deposit rates and heavier reliance on (stable) deposit funding realises downward pressure on net interest margins.
- Alessio Bongiovanni, Alessio Reghezza, Riccardo Santamaria, Jonathan Williams
- 2021
Mar 7, 2018 · Results show that low interest rates lead to significantly higher allocations towards risky assets in both samples. The likely mechanisms relate to investor psychology, including reference dependence and salience.
Jun 11, 2024 · Interest rate risk is an inherent part of financial markets that can significantly impact investment outcomes. By understanding the types of interest rate risk and implementing strategies to mitigate it, investors and borrowers can better navigate the complexities of the financial landscape.
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Oct 17, 2007 · Do low levels of short-term interest encourage risk-taking that can be considered ‘excessive’? Do low interest rates imply higher credit risk in the short-run? In the medium-run? New empirical research suggests that the answers are a resounding ‘yes’, a subtle ‘no’ and a qualifying ‘it depends’.
