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What are the two questions that a fixed income portfolio manager needs to address when managing...

What are the two questions that a fixed income portfolio manager needs to address when managing an active portfolio?

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Expert Solution

The portfolio is the group of assets where different assets are present. A fixed income portfolio is the portfolio which gives fixed income on periodic basis generally monthly. The investors are guranteed a fixed income regularly so the portfolio should generate over and above those income as thee are several expenses which the fims has to incur. So, it puts the manager involved. While managining the active portfolio, the managers tries to beat the market in order to gain superior return but he should consider the market forces so that it should not suffer any risk due to this. So, managining the risk and generating the return are important here.


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