Pension fund managers can generally best bring about an effective reduction in their interest rate risk by holding ________.

Question

Quizplus · Accepted Answer

Long-duration bonds have a longer weighted average life than long-maturity bonds, which means that they are more sensitive to changes in interest rates. By holding long-duration bonds, pension fund managers can increase their exposure to interest rate risk and potentially reduce their overall risk.

Pension Fund Managers Can Generally Best Bring About an Effective