What is an interest rate risk

Interest rate risk is the potential that a change in overall interest rates will reduce the value of a bond or other fixed-rate investment:

As interest rates rise bond prices fall, and vice versa. ...

Interest rate risk is measured by a fixed income security's duration, with longer-term bonds having a greater price sensitivity to rate changes.

Explanation:

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Interest rate risk is the risk that arises for bond owners from fluctuating interest rates. How much interest rate risk a bond has depends on how sensitive its price is to interest rate changes in the market. The sensitivity depends on two things, the bond's time to maturity, and the coupon rate of the bond

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