More investing tips and tricks for everyone
Editor’s note: This is the final of a three-part series on the basics of investing money.
• Reinvestment risk — The yield-to-maturity calculation assumes reinvestment of semi-annual income at the stated or coupon rate. A zero-coupon bond is exempt from reinvestment risk, because it is structured to compound at the stated rate of return. (More on zero-coupon bonds below.)