Wednesday, 28 March 2012

News Pick - (Reuters) - U.S. bond funds designed to fight inflation have relaxed their guard against rising interest rates, leaving investors vulnerable to heavy losses

Interest rate risk (duration) has been discussed extensively in Level I and Level II curriculum under Fixed Income. In level a basic understanding is developed and it is considered to be a highly testable area while in Level II a more in depth approach is introduced. Key rate duration is discussed, measuring the duration of portfolio with non-parallel shift in interest rates Candidates who are done with Fixed Income will find this news pick relevant to what they have been studying in the curriculum.

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