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Inside the company fixed income managers bought bonds but they did not keep them for very long at all. Instead, they were constantly buying, exchanging

Inside the company fixed income managers bought bonds but they did not keep them for very long at all. Instead, they were constantly buying, exchanging and selling the bonds in their portfolios Explain why the behavior described in the above quote may happen in terms of interest-rate risk immunization and downgrade risk.

Do not discuss speculation or arbitrage as causes of this behavior as these will not gain any credit in this examination.

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