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← Bond Laddering
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Question
What two risks does a bond ladder attempt to balance simultaneously?
1
Reinvestment risk (the risk of having to roll at lower future rates) and duration risk (the price sensitivity of long-dated bonds to rising rates)
2
Credit risk (default) and inflation risk (loss of real purchasing power)
3
Currency risk and liquidity risk
4
Liquidity risk (inability to sell) and concentration risk (too few issuers)
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