Interest-rate risk is important to
A) active bond portfolio managers.
B) passive bond portfolio managers.
C) both active and passive bond portfolio managers.
D) neither active nor passive bond portfolio managers.
E) obsessive bond portfolio managers.

Question

Quizplus · Accepted Answer

Interest-rate risk is a crucial consideration for both active and passive bond portfolio managers because changes in interest rates affect the value of bonds in their portfolios. Active managers may try to anticipate and exploit interest rate movements, while passive managers need to understand interest rate risk to maintain their portfolio's alignment with its benchmark.

Interest-Rate Risk Is Important to