A portfolio is equally invested in securities with 1-, 2-, and 3-years to maturity. Each year as the 1-year securities mature, the funds are reinvested in 3-year securities. This is an example of which investment strategy?
A) Barbell maturity strategy
B) Riding the yield curve
C) Laddered maturity strategy
D) Timing maturity strategy
E) Cycle maturity strategy

Question

Quizplus · Accepted Answer

This is an example of a laddered maturity strategy, where the portfolio is evenly distributed across different maturity dates, and as the shorter-term securities mature, the proceeds are reinvested in longer-term securities, maintaining the original distribution.

A Portfolio Is Equally Invested in Securities with 1-, 2-