Your son will be ready for college or university in 10 years and your daughter in 15 years. Which of the following bond strategies would be best suited to your goal of financing your children's education?

Question

Quizplus · Accepted Answer

Maturity matching strategy involves investing in bonds that mature around the same time as the financial goal, in this case, college education. As the son will be ready in 10 years and the daughter in 15 years, investing in bonds with a corresponding duration will allow for the funds to be available when needed without undue risk. Other strategies such as interest rate and active can be more volatile, and passive strategies may not provide the desired return on investment.

Your Son Will Be Ready for College or University in 10