corporate governance

hey guys i was reading corporate governance in book four of the candidate reading. i had no idea what was important in the reading, it just went on and on. i am thinking about switching to schweser for corporate governance, any thoughts? second question, i thought a portfolio manager purchases fixed-income securities for the coupons to meet their future cash outflows, how does it matter so much when the price of the bond changes due to changes in the interest rate?\ thx

Just a shot in the dark on your second question, but a FI PM could purchase securities for a few reasons, as yield is just one component of total return. Imagine a manager selling securities prior to their maturity, changes in interest rates affect the price they’ll sell at, not to mention the effect the interest rates have on reinvested coupons. A PM might be less sensitive to the changes in interest rates when using a cash flow matching method to meet liabilities (relative to an immunization strategy), though reinvestment rate risk is still a factor. ywu002 Wrote: ------------------------------------------------------- > hey guys i was reading corporate governance in > book four of the candidate reading. i had no idea > what was important in the reading, it just went on > and on. i am thinking about switching to schweser > for corporate governance, any thoughts? > > second question, > > i thought a portfolio manager purchases > fixed-income securities for the coupons to meet > their future cash outflows, how does it matter so > much when the price of the bond changes due to > changes in the interest rate?\ > > thx

For your second question. From an asset-liability approach (pension), changing of interest rate can change the value of your asset (if the portfolio is FI heavy) and your liablity(which is debt-like). Therefore, your surplus can change with change of interest rate too.