 In this section, we are going to talk about a very interesting concept and that is the interest rate risk. So, when you have invested in a certain financial instrument or you have invested in a portfolio, then you have to keep an eye on this thing that what kind of fluctuations are there in the interest rate. So, usually, we see that fluctuations whenever the monetary policy is revised by the government through the state bank or through the central bank, then there are often changes in your bank rate which the state bank announces that the minimum threshold level of interest we have fixed this value. So, all the financial institutions for all kinds of financial instruments keep an eye on that bank rate and keep an eye on your risk factors and develop different plans, different instruments and accordingly, you fix the interest rate and tell that for this particular thing we are going to offer you this interest rate. So, if we see that there is an increase in the interest rate, then that can be harmful for your investment because if you are expecting a return from your investment that you have bought a bond or security or coupon bond and for that you have been told a certain amount, fixed amount that after a certain time passes, you will get so much money that the prevailing interest rate is and if there is an increase in the interest rate then what will happen to that? from that, the money you have invested in the bond from that, the yield of that may be if you go beyond the interest rate, it will benefit you more that you withdraw your money from it and put it in the bank. So, the price changes and that is, what will happen to that? the value of your financial instrument will drop and because the demand is reduced and when we talk about price changes then we see that the prices of the financial instrument which keeps changing in the market with the interaction of demand and supply that then influences your return. more or less we can say that usually we see that from plus 20% to minus 20% the fluctuation in the prices on average occurs in the market and by doing this, you may get this fluctuation that if you continue investing in a certain financial instrument then you may get the loss. therefore, we need to understand that from the drop in the interest rate the coupon bond you have taken or any financial instrument you have taken will affect the prices by increasing or decreasing the interest rate. and the fluctuation which we are causing due to the fluctuation in the interest rate we call this phenomenon interest rate risk it is important to consider whenever you have decided to invest in a certain financial instrument it is necessary for you to account for the interest rate risk and the interest rate risk is the increase or decrease in the prices of a financial instrument and the returns of the financial instrument due to the changes in the interest rate due to the fluctuation in the interest rate the decrease or decrease in the prices of a financial instrument and the returns of the financial instrument which you have to experience they are termed as the interest rate risk no matter how small the maturity period of a financial instrument will be, the interest rate risk is less but as soon as we talk about long time period of financial instruments which have a long maturity period like you have invested for 20 years or invested for 25 years in that case your interest rate risk that would be very high so whenever you are going to make the financial decision making you have to invest not only consider the interest rate but also account for the interest rate risk also