The correct answer is: C. reinvestment risk.
Reinvestment risk is the risk that the income from an investment will not be sufficient to cover the cost of reinvesting the principal at a later date. This risk is most commonly associated with fixed-income investments, such as bonds, which pay a fixed rate of interest. If interest rates fall, the value of bonds will rise, but the income they generate will fall. This means that investors may have to reinvest their principal at a lower rate of interest, which could reduce their overall return.
Income risk is the risk that an investment will not generate enough income to meet the investor’s needs. This risk is most commonly associated with equity investments, such as stocks, which do not guarantee a fixed rate of return. If the stock market falls, the value of stocks will fall, and investors may not receive enough income to cover their expenses.
Investment risk is the overall risk associated with an investment. This risk includes both income risk and reinvestment risk, as well as other risks such as market risk, credit risk, and liquidity risk.
Mature risk is the risk that an investment will not be able to meet its obligations when it matures. This risk is most commonly associated with debt investments, such as bonds, which have a maturity date at which the principal is repaid. If the issuer of the bond defaults, investors may not receive their principal back.