Define interest rate risk. Assume you are the manager of a portfolio of corporate bonds and you
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Question:
Define interest rate risk. Assume you are the manager of a portfolio of corporate bonds and you believe interest rates will soon fall. What adjustments should you make to your portfolio based on your beliefs? Remember that as a bond portfolio manager you are mandated to maintain an investment in bonds. You cannot simply change your investment universe to stocks, gold, real estate, etc because of what you think is going to happen in the markets. You must maintain your bond investment but you can certainly change the kinds of bonds that you hold.
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