Mary Sheets Is Considering Investing in 30 Year Corporate Bonds

Multiple Choice

Mary Sheets is considering investing in 30 year Corporate Bonds issued by Duke Energy Company. She knows that she will earn an interest rate of 8% by purchasing these bonds. However, she is concerned because she might need to take her money out of this investment in a year and she has heard that she might have to sell the bonds at a significantly lower price than she will purchase them for. What type of risk is Mary concerned about?

A) Inflation risk
B) Interest rate risk
C) Income risk
D) Personal risk
E) Liquidity risk