Cash flows from an investment, such as interest or coupon payments, are subject to reinvestment risk if the investor is concerned about not being able to reinvest them at a rate of return at least equal to the current rate. This new interest rate is known as the reinvestment rate. Since zero-coupon bonds never pay a coupon, they are risk-free investments.

In order to make a profit after paying the commission to the agent, the seller will likely market the home at a premium price, making the commission a significant factor for the buyer. In order to close the sale and make everyone happy (the seller, the buyer's agent, and the listing agent), the buyer's representative can negotiate a reduced commission with the listed agent

Investing in individual stocks can be risky due to the unpredictable nature of the stock market. Learn why investing in individual stocks is not suggested.