This is an outlier question, or an eas…? I have no idea what it’s talking about when I saw it. Wish it’s a level 2 question.
Foward inteest rates can be used to derive the strategic bond allocation by increasing exposure to markets where the expected bond yield is farthest above the forward yield.
What i can think of is forward interest rate are the implied expected spot rate. Now compare with the expected bond yield (i.e. implied expected market rates) & increase the exposure to markets where this difference is maximum.