What are the risks associated with the disposingof a bond issue in an investment-grade corporatebond index after it is downgraded to noninvestmentgrade?
Answer to relevant QuestionsWhat has been the observed price performance offallen angels after they have been downgraded? Why is there greater risk in a multi-periodimmunization strategy than a cash flow matching strategy? How can the interest-rate risk of the projected liabilities of a defined benefit pension plan be measured? The following excerpt is from a January 18, 2008 article (“LDI Strategy that is Liable to Word?”) by Penny Green, Chief Executive of the SAUL Trustee Company (a U.K. that advises on pension management) and deals with ...What is the time-weighted average monthly rate of return for the two managers in Question 2?
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