Question

Which of the following is an example of a portfolio strategy that invests in bonds with two ends of the yield curve?

	A.	Barbell strategy
	B.	Ladder strategy
	C.	Butterfly strategy
	D.	Bullet strategy

Answer 1

Ladder strategy is a strategy where an investor invests in different securities with different maturities so this cannot be the answer

Bullet strategy is a strategy where the investor invests in bonds that invests at the same time so this can also not be the answer.

But talking about the barbell strategy in this the investor invests only in long term and short term bonds and not in intermediate bonds so this is an example of investing with two ends of the yield curve.

Hence, Option A is the answer