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5. Bond investment strategies Use the following table to determine whether each scenario is representative of a matching, faddered, barbell, or interest rate bond investment

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5. Bond investment strategies Use the following table to determine whether each scenario is representative of a matching, faddered, barbell, or interest rate bond investment strategy Strategy Matching Laddered Interest Rate Barbell Scenario An investor that distributes funds in their portfolio to short-term and long-term bonds to achieve high rates of returns, while also maintaining liquidity in the portfolio An investor that estimates their future cash outflows and then develops a bond portfolio that will generate enough coupon and principal payments to cover those outflows. An Investor that creates a bond portfolio that has a wide range of maturities and therefore, different sensitivities to interest rates, as to reduce (but not eliminate) interest rate risk. An investor that distributes funds in their portfolio in a way that capitalizes on forecasted changes in interest rates

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