What is bond laddering?

Question

Quizplus · Accepted Answer

Bond laddering is an investment strategy that involves buying bonds with staggered maturity dates. This helps to balance the risk and return of the portfolio, as different bonds will mature at different times and interest rates may vary. It also helps to provide a steady stream of income as cash flows in from the maturing bonds can be reinvested into new bonds. Option A and B are not bond laddering as they do not involve a mixture of different maturity dates. Option D refers to a different investment strategy that combines stocks and bonds. Option E refers to exchanging bonds for shares of stock, which is not related to bond laddering.

What Is Bond Laddering