n NISM Certifications
X NISM Series X
Medium

What is the primary utility of 'Laddering of Bonds'?

Practice question from NISM Series XB- Investment Adviser (Level 2) Mock Test 1 — bank. The correct answer is highlighted below with a full explanation.

Options

  1. A

    Managing credit risk

  2. B

    Obtaining higher interest rates

  3. Managing interest rate risks

    Correct answer

  4. D

    Managing both interest rate and credit risks

Why this is the answer

Bond laddering spreads investments across various maturities, reducing exposure to interest rate fluctuations and ensuring better cash flow management.

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