Active bond management strategies include:
A)Forecasting changes in interest rates,identifying abnormal yield spreads between bond sectors,and identifying relative mispricing between fixed income securities.
B)Passive bond index investing.
C)Buy-and-hold bond investing.
D)Ladder investing.

Question

Quizplus · Accepted Answer

Active bond management strategies involve actively managing a bond portfolio to try to generate superior returns. This includes forecasting changes in interest rates, identifying abnormal yield spreads between bond sectors, and identifying relative mispricing between fixed income securities. Passive bond index investing (B) involves investing in a bond index without trying to actively manage the portfolio. Buy-and-hold bond investing (C) involves purchasing bonds and holding them until maturity without trying to actively manage the portfolio. Ladder investing (D) involves purchasing bonds with staggered maturities to help manage interest rate risk. While all of these strategies have their benefits, only A involves actively managing a bond portfolio to try to generate superior returns.

Active Bond Management Strategies Include