What should the directors be told about the ideal compositio

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An insurance company's board of directors has asked for an explanation of the effect of interest rate changes on bond values and on the choices between high coupon and low coupon bonds or between long and short term maturities. Based on bond theorems, what should the directors be told about the ideal composition of a bond portfolio when market yields are rising?; when they are falling?

Reference no: EM13784399

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