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For a portfolio of long-term bonds, what type of yield curve should be considered?

For a portfolio of long-term bonds, what type of yield curve should be considered?

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Answer #1

Answer-

Portfolio of Long term bonds

The Upward sloping yield curve is preffered for the portfolio of long term bonds because the investors want to be compensated with higher yields for investing and assuming the added risk as the investor want higher returns for higher risk.

The long term bonds are sujected to higher risk because the market conditions change overtime and the investors needs higher yields to compenate higher risk involved in investing in long term bonds.

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