At a meeting between a portfolio manager and a prospective
At a meeting between a portfolio manager and a prospective client, the portfolio manager stated that her firm’s bond investment strategy is a conservative one. The portfolio manager told the prospective client that she constructs a portfolio with a forward-looking tracking error that is typically between 250 and 300 basis points of a client-specified bond index. Explain why you agree or disagree with the portfolio manager’s statement that the portfolio strategy is a conservative one.
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