Question: Question 3 (25 marks) a. Identify three bond fundamental relationships and explain how can you apply these relationships in portfolio management. (10 marks) b. You

Question 3 (25 marks)

a. Identify three bond fundamental relationships and explain how can you apply these relationships in portfolio management. (10 marks)

b. You expect interest rates to increase over the next nine months. Given the interest rate outlook, state what kinds of bonds you want in your portfolio in term of time to maturity, coupons and duration and explain your reasoning for this choice. (7 marks)

c. Briefly explain with appropriate examples bond portfolio management strategies. (8 marks)

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