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5. Bond investment strategies Use the following table to determine whether each scenario is representative of a matching, laddered, barbell, or interest rate bond investment
5. Bond investment strategies Use the following table to determine whether each scenario is representative of a matching, laddered, barbell, or interest rate bond investment strategy. Strategy Matching Interest Rate Laddered 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. O o 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 distributes funds in their portfolio in a way that capitalizes on forecasted changes in interest rates. O o An investor that evenly distributes funds to bonds in their portfolio across several different maturity classes. O o o
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