Investment style for a bond portfolio is best characterized by

Question

Quizplus · Accepted Answer

Credit quality and duration are the two most important factors in determining the investment style of a bond portfolio. Credit quality (such as AAA or BB) refers to the creditworthiness of the issuer and can affect the expected return and risk of the bond. Duration measures a bond portfolio's sensitivity to changes in interest rates. Long-duration bonds have higher interest rate risk, while short-duration bonds have lower interest rate risk, making duration a crucial factor in constructing a bond portfolio. Beta, yield to maturity, and interest rate risk are also important factors, but not as crucial as credit quality and duration.

Investment Style for a Bond Portfolio Is Best Characterized by