bullet and barbell portfolio

sessiljoseph
Good Student
Posts: 22
Joined: Sat Apr 26, 2014 7:29 am

bullet and barbell portfolio

Postby sessiljoseph » Thu May 01, 2014 1:10 pm

If there is a SMALL parallel shift in the yield curve, how does their performance
compare?
a) Barbell outperforms bullet
b) Bullet outperforms barbell
c) Same or similar
d) Need more information

edupristine
Finance Junkie
Posts: 722
Joined: Wed Apr 09, 2014 6:28 am

bullet and barbell portfolio

Postby edupristine » Fri May 02, 2014 6:45 am

Ans is A.
If there is parallel shift in interest rates either up or down barbell will outperform the bullet.
And if the shift is not parallel anything could happen.


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