A member of a firms investment committee is very interested in learning about the management of fixed-income

Question:

A member of a firm’s investment committee is very interested in learning about the management of fixed-income portfolios. He would like to know how fixed-income managers position portfolios to capitalize on their expectations concerning three factors which influence interest rates:
a. Changes in the level of interest rates.
b. Changes in yield spreads across/between sectors.
c. Changes in yield spreads as to a particular instrument.
Formulate and describe a fixed-income management strategy for each of these factors that could be used to exploit a manager’s expectations about that factor. (Three strategies are required, one for each of the listed factors.)

Portfolio
A portfolio is a grouping of financial assets such as stocks, bonds, commodities, currencies and cash equivalents, as well as their fund counterparts, including mutual, exchange-traded and closed funds. A portfolio can also consist of non-publicly...