This is from the Fixed Income section onthe CFA website!
Will someone please tell me what this questions is asking and why the answer? =(
what is your question?
Given current market conditions, which strategy that Farro describes to the investment committee is least likely to have a favorable performance impact on HIA’s portfolios?
this one on the topic test for FARRO! Its questions 3. I wasnt sure if I was allowed to post the contents without violating the standard.
Well if you buy more new issue while new issue credit spread are increasing (ie their price decreasing), this is definitely not favorable to the portfolio
Thank you!
Do you know why the other two answers wouldn’t work?
The one with the structure is basically an accretive position for the portfolio as they buy structures while telling you they will be lses issuance of them ie they will increase in price
The other proposition seemed too vague to me to answer the question so that’s why I eliminated it, but maybe someone has a smarter answer.