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CFA Level 3
Fixed Income Portfolio Management

Reducing Interest Rate Risk in Fixed Income Portfolio Management

Very Easy Managing Fi Portfolios Interest Rate Risk

In the context of managing a fixed income portfolio, understanding the impact of interest rate changes is crucial. Interest rate risk refers to the potential for investment losses that result from a rise in interest rates. A portfolio manager needs to assess how sensitive their bond holdings are to fluctuations in interest rates.

Given this context, consider the following options for reducing interest rate risk in a fixed income portfolio.

Hint

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