Recommendations & StrategiesQuestion 43 of 100
Bond laddering is a strategy primarily used to manage which risk?
a.Currency risk
b.Political risk
c.Business risk
d.Interest-rate and reinvestment risk
Explanation
A bond ladder staggers maturities so that portions of the portfolio mature at intervals, reducing exposure to reinvesting all funds at a single rate and smoothing interest-rate risk. It provides regular liquidity and flexibility. It does not primarily address currency or political risk.
Practice all 100 questions free — no signup required.
Related questions on this topic
- A 30-year-old client with stable income, a long time horizon, and high risk tolerance wants aggressive growth. Which asset allocation is MOST suitable?
- A retired client living on a fixed income needs current cash flow and capital preservation. Which recommendation best fits this profile?
- An investor holds municipal bonds. The interest is generally MOST attractive to which type of investor?
- Under the strategic asset allocation approach, an investor primarily:
- A client sells stock held for 14 months at a gain. This gain is generally taxed as:
- An investor sells a stock at a loss and repurchases the same stock 10 days later. The wash-sale rule will:
Last reviewed: · editorial process
PrepPass Editorial Team · Verified against NASAA Series 66 Uniform Combined State Law Exam · How we review