Investors can mitigate effects of increase in interest rates

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Reference no: EM131928948

1. Under a laddering approach, investors can mitigate the effects of an increase in interest rates by

purchasing bonds with the same maturity dates and selling short bonds with other maturity dates

purchasing bonds with the same maturity date but different coupon rates

purchasing bonds with different maturity dates

purchasing bonds with different yield to maturity

2. An investor has three sources of dollar returns from a bond investment. Which of the following is NOT included among the three sources

The semi-annual coupon payments

The interest earned on reinvesting the coupon payments

The principal paid at maturity

The interest earned on reinvesting the last coupon and the principal

Reference no: EM131928948

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