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5. Given a portfolio of bonds1 explain how you ean hedge its risk by taking positions in additional bonds? (hint: how to reduce the sensitivity
5. Given a portfolio of bonds1 explain how you ean hedge its risk by taking positions in additional bonds? (hint: how to reduce the sensitivity of the bond prices to the change of the interest rates?) What is the limitation of the hedging strategy? Justify hos:r you measure the sensitivity
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Investment Analysis and Portfolio Management
Authors: Frank K. Reilly, Keith C. Brown
10th Edition
978-0538482387
