Glossary of Municipal Securities Terms


The risk that interest rates may be lower than the yield on a fixed income security when the owner seeks to reinvest interest income received from the security. The term also sometimes refers to the risk that principal repayments on such a security may be paid prior to maturity (e.g., early redemption), thereby forcing the owner to seek reinvestment of principal at a time when interest rates may be lower than the rate that was payable on the security.

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