Define What Is Meant by Interest Rate Risk

question 254

Essay

Define what is meant by interest rate risk. Assume you are the manager of a $100 million portfolio
of corporate bonds and you believe interest rates will fall. What adjustments should you make to
your portfolio based on your beliefs?

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Definitions:

Statutory

Related to, or created by, statutes, which are laws enacted by a legislative body.

Mechanic's Lien

A legal claim against a property for unpaid work or supplies, giving workers and suppliers a form of security for their investment.

Homeowner

An individual who owns and resides in a house or property.

Contractor

An individual or company that enters into a contract to perform services or provide goods for another party in exchange for compensation.