With a(n) ____ strategy, funds are allocated to bonds with a short term to maturity and bonds with a long term to maturity. Thus, this strategy allocates some funds to achieving a relativelyhighreturn and other funds to covering liquidity needs.

Question

Quizplus · Accepted Answer

The barbell strategy involves allocating funds to bonds with both short-term and long-term maturities, with the aim of achieving both high returns and covering liquidity needs. This approach can help investors balance their risk exposure and ensure they can meet their short-term liquidity needs while still earning higher returns on their long-term investments. The other choices, such as matching (allocating funds to bonds with maturities that match the investor's financial goals), laddered (spreading investments evenly across bonds with different maturities), and interest rate (investing based on expectations of changes in interest rates) do not involve the same balance of short- and long-term investments as the barbell strategy.

With A(n) ____ Strategy, Funds Are Allocated to Bonds with a Short