Question
What are the advantages of having a bond ladder? Mark all that apply. In a bond ladder, you can diversify by buying bond funds, like
What are the advantages of having a bond ladder?
Mark all that apply.
In a bond ladder, you can diversify by buying bond funds, like a global bond fund, a high-yield bond fund, and Treasury bond fund, each with a different maturity date.
If interest rates move up over time, as the shorter term bonds mature, Mr. Bond will be able to use the proceeds from those bonds to buy new bonds at a higher interest rate.
Investing in a bond ladder can help mitigate reinvestment risk.
Bond ladders help to diversify over time.
Because you own several different bonds in a bond ladder, you eliminate the risk of inflation.
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