A current asset that represents the amounts due to the company resulting from the sale of goods and services on credit to customers. A risk a purchaser of a bond needs to take into consideration when calculating the yield to maturity on the bond. The calculation assumes that coupn repayments are reinvested at the same rate as the yield to maturity calculated at the time of purchase. The risk is that over the life of the bond interest rates fall and the coupon payments are reinvested at less than the yield to maturity at the time of purchase.
Reinvestment risk is one of several types of risk associated with bonds.
Others are interest rate risk, credit risk, call risk, inflation risk, currency risk, and event risk. The inflation rate is the RPI s percentage increase usually compared with the same month the previous year. In the US the consumer price index does a similar job. A profitability ratio which measures the return a company has generated through the use of its total assets. A measurement of profitability.