Interest Rate Risk. Interest rates can rise as well as fall. A risk exists with interest rates that the relative value of a security will worsen due to an interest rate increase. This could impact negatively on other products. There are additional interest rate related risks in relation to floating rate instruments and fixed rate instruments. For example interest income on floating rate instruments cannot be anticipated. Due to varying interest income, you are not able to determine a definite yield of floating rate instruments at the time you purchase them, so that your investment return cannot be compared with that of investments having longer fixed interest periods.
Appears in 6 contracts
Sources: Professional Client Agreement, Professional Client Agreement, Professional Client Agreement