Question
As an active portfolio manager for our EFIF, which of the following strategies are you most likely to employ in your portfolio? A. If you
As an active portfolio manager for our EFIF, which of the following strategies are you most likely to employ in your portfolio?
A. If you expect the economy to improve, you will expect credit spreads to widen/increase and will therefore avoid high yield investment.
B. If you expect future interest rates to remain unchanged, it would be feasible to consider generating additional interest income by investing in longer maturity (or higher duration) investments.
C. If you expect interest rate to decrease, you will decrease the duration of the portfolio.
D. If you predict a slow or poor economy, you will expect interest rates to increase and will therefore increase the duration of the portfolio.
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