Question

Prepayment of loans by the borrowers
and/or premature withdrawal of deposits
by the deposit holders due to change in
the level of interest rates give rise to: *
Emin plion Risk
O Price Risk
You Curve Risk​

Answer 1

Prepayment risk is the risk associated with the early unscheduled return of part of the principal early, they do not have to make interest payments on Callable bonds favor the issuer because they tend to make interest rate risk one-sided.  Investors in callable bonds lose when interest rates rise