Liquidity Management in Fixed Income Portfolios

Very Easy Managing Fi Portfolios Liquidity Management

As a fixed income portfolio manager, it is crucial to ensure that the portfolio maintains adequate liquidity to meet any potential cash flow needs. Liquidity management involves preparing for unexpected cash expenses without having to sell securities at an unfavorable price.

Consider the following choices regarding liquidity management in fixed income portfolios:

Investing exclusively in low-rated bonds to maximize yield.

Holding a portion of the portfolio in cash and cash equivalents.

Focusing on long-duration bonds to capture higher interest rates.

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