Holding period risk is afinancial risk that a firm'ssales quote giving a potentialretail client a certain time to sign the offer for acommodity, will actually be a financial disadvantage for the offering firm since themarket price's on thewholesale market has changed. The risk is usually reduced by arisk premium being added onto thewholesale price of acommodity by the offering firm.
An alternative and less general definition is: Holding period risk isthe risk, while holding abond, that a better opportunity will present itself that you may be unable to act upon.[1]
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