Key Strategies for Managing Credit Risk in Investment Portfolios

As a portfolio manager, understanding credit risk is essential for maintaining the stability of your investment portfolio. Credit risk refers to the possibility of loss due to a borrower's failure to repay a loan or meet contractual obligations. It can affect both individual investments and the overall portfolio. In light of this, discuss the key strategies that can be employed to manage credit risk within an investment portfolio. Be sure to cover at least three distinct strategies and provide examples of how they can be effectively implemented to mitigate risk.