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The yields are expected to fall by 1.5% and 0.005% respectively for the two extreme periods and that Bond C and Bond B mature in

The yields are expected to fall by 1.5% and 0.005% respectively for the two extreme periods and that Bond C and Bond B mature in 2 years and 5 years respectively and both have face values of $1000. The coupon rates are 4% and 8% for bond C and B respectively. 


Assuming that you are already holding 5000 units of Bond C and 1400 units of Bond B, evaluate the value created by the pro-active strategy you will have to take. 


Why might the Cash flow matching strategy in bond portfolios be not preferred by fund managers in upcoming markets?

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