Describe how the interest rate strategy for bond investment works. What are some of the potential problems with this strategy?
Answer to relevant QuestionsHow does the passive strategy for bond investment work? What is the main disadvantage of this strategy? Why are prices of some bonds more sensitive to economic conditions than others? What are corporate bonds? Are corporate bonds subject to default risk? What are junk bonds? Why would investors purchase junk bonds? Mia wants to invest in Treasury bonds that have a par value of $ 20,000 and a coupon rate of 4.5%. The bonds have a 10 year maturity, and Mia requires a 6% return. How much should Mia pay for her bonds, assuming interest is ...Why do investors invest in index funds? Discuss the popularity of index fund investment as it relates to expenses. What tax advantage do index funds offer relative to other types of mutual funds?
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