Which of the following is considered a risk associated with bonds?

All of the options listed are indeed risks associated with bonds, making this answer comprehensive.

Inflation risk refers to the possibility that the purchasing power of a bond’s future cash flows will diminish due to rising prices. When inflation increases, the fixed interest payments from a bond may not keep pace with the cost of living, leading to a reduction in real returns for investors.

Market liquidity risk involves the potential difficulty in buying or selling bonds without significantly affecting their price. If a bond is thinly traded or if the market as a whole is experiencing low liquidity, an investor might not be able to sell the bond quickly or without incurring a loss.

Currency risk, which applies to bonds issued in foreign currencies, is the risk that fluctuations in exchange rates will negatively impact the value of bond payments when converted back to the investor's home currency. This is particularly relevant for investors who hold bonds that are denominated in a currency other than their own.

Each of these risks poses a distinct challenge to bond investors, underscoring the complexities of fixed-income investments. Thus, recognizing all these risks provides a more rounded understanding of the potential downsides of holding bonds in a portfolio.