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Business, 25.07.2019 05:30 butty68

The dillinger state bank has purchased a bond from the interstate manufacturing company that has 15 years to maturity and has a coupon rate of 12.5%. market interest rates have recently declined to 8% and the dillinger state bank is worried that the interstate manufacturing company will retire the bond and issue new ones with a lower coupon rate. what type of risk is the dillinger state bank worried about?

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