A portfolio manager that attempts to select bonds based on their intrinsic value would be carrying out
A) credit analysis.
B) valuation analysis.
C) yield-spread analysis.
D) horizon-matching analysis.
E) interest-rate analysis.

Question

Quizplus · Accepted Answer

Selecting bonds based on their intrinsic value involves valuation analysis, which focuses on determining a bond's true worth based on various factors such as its cash flows, credit quality, and market conditions. Credit analysis pertains to assessing a borrower's ability to repay debt, while yield-spread analysis involves comparing the yields of different bond categories. Horizon-matching analysis refers to aligning investments with specific future liabilities or goals, and interest-rate analysis involves forecasting changes in interest rates and their potential impact on a portfolio's performance.

A Portfolio Manager That Attempts to Select Bonds Based on Their