How the spread duration of a fixed income portfolio

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Explain how the spread duration of a fixed income portfolio can be used to position the portfolio for a change in economic conditions. Specifically, discuss what a portfolio manager could do if they expect economic con- ditions (increasing default rates and widening credit spreads) to deteriorate. Refer to the current economic climate and discuss why maximisation/minimisation optimisation methods don't often work in reality?

Reference no: EM132608639

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