The most aggressive investment maturity strategy that calls for the bank to continually shift the maturities of its securities in response to changes in forecasts of interest rates and other economic conditions is known as:
A)barbell strategy.
B)rate expectations approach.
C)front-end loaded policy.
D)ladder approach.
E)None of the options is correct.

Question

Quizplus · Accepted Answer

The rate expectations approach is the most aggressive investment maturity strategy that involves constantly adjusting the maturities of securities based on forecasts of interest rates and other economic conditions. This approach aims to maximize returns by capitalizing on changes in market conditions. The barbell strategy involves investing in securities with very short and very long maturities, while the ladder approach involves investing in securities with staggered maturities. The front-end loaded policy involves investing in securities with short-term maturities. Therefore, the rate expectations approach is the best choice for this question.

The Most Aggressive Investment Maturity Strategy That Calls for the Bank