A forecast of bond returns based largely on a prediction of the yield curve at the end of the investment horizon is called a ________.

Question

Quizplus · Accepted Answer

Horizon analysis is a forecast of bond returns based on predicting the yield curve at the end of the investment horizon. Contingent immunisation is a strategy using duration to match the present value of assets with eventual liabilities. Dedication strategy is a form of immunisation that invests in bonds with maturity matching the investor's future cash flow needs. Duration analysis is a method of measuring the sensitivity of a bond's price to changes in interest rates. None of these are specifically related to forecasting bond returns based on predictions of the yield curve.

A Forecast of Bond Returns Based Largely on a Prediction