A type of interest rate risk which asserts that the characteristics of interest rate fluctuation are variable (as opposed to constant) over a period of time. Although interest rates are expected to fluctuate over the period of an investment, the probability of an interest rate change is not always constant, nor is the magnitude of the volatility of interest rate changes.

Generally speaking, it is impossible to predict with certainty the characteristics of a changing variable such as interests rates into the future. While it is possible to make reasonably accurate predictions, some amount of uncertainty still exits. This uncertainty represents a tangible risk, which must be incorporated into the price of an investment vehicle.

www.tandfonline.com [PDF]

… 4 Using the Augmented Dickey–Fuller test, the unit root hypothesis for both series is rejected at 0.01 level of significance. References. References … The pricing of interest rate risk: evidence from the stock market … The Philippine Review of Economics, 24: 121–41. [Google Scholar] …

www.tandfonline.com [PDF]

… 4 Using the Augmented Dickey–Fuller test, the unit root hypothesis for both series is rejected at 0.01 level of significance. References. References … The pricing of interest rate risk: evidence from the stock market … The Philippine Review of Economics, 24: 121–41. [Google Scholar] …

www.tandfonline.com [PDF]

… 4 Using the Augmented Dickey–Fuller test, the unit root hypothesis for both series is rejected at 0.01 level of significance. References. References … The pricing of interest rate risk: evidence from the stock market … The Philippine Review of Economics, 24: 121–41. [Google Scholar] …

onlinelibrary.wiley.com [PDF]

… 4 Using the Augmented Dickey–Fuller test, the unit root hypothesis for both series is rejected at 0.01 level of significance. References. References … The pricing of interest rate risk: evidence from the stock market … The Philippine Review of Economics, 24: 121–41. [Google Scholar] …

www.sciencedirect.com [PDF]

… 4 Using the Augmented Dickey–Fuller test, the unit root hypothesis for both series is rejected at 0.01 level of significance. References. References … The pricing of interest rate risk: evidence from the stock market … The Philippine Review of Economics, 24: 121–41. [Google Scholar] …

www.sciencedirect.com [PDF]

… 4 Using the Augmented Dickey–Fuller test, the unit root hypothesis for both series is rejected at 0.01 level of significance. References. References … The pricing of interest rate risk: evidence from the stock market … The Philippine Review of Economics, 24: 121–41. [Google Scholar] …

www.sciencedirect.com [PDF]

… 4 Using the Augmented Dickey–Fuller test, the unit root hypothesis for both series is rejected at 0.01 level of significance. References. References … The pricing of interest rate risk: evidence from the stock market … The Philippine Review of Economics, 24: 121–41. [Google Scholar] …

www.jstor.org [PDF]

… 4 Using the Augmented Dickey–Fuller test, the unit root hypothesis for both series is rejected at 0.01 level of significance. References. References … The pricing of interest rate risk: evidence from the stock market … The Philippine Review of Economics, 24: 121–41. [Google Scholar] …

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A probability distribution function means that you can assign probabilities for different levels of change in an investment's value based on historical data.

Uncertainty must be incorporated into the price of an investment vehicle by using a probability distribution function.

Rate level risk is a type of interest rate risk which asserts that the characteristics of interest rate fluctuation are variable (as opposed to constant) over a period of time.

No, it is not possible to predict future changes in interest rates with certainty.

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