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A portfolio manager is analyzing a fixed-income portfolio and its correlation to various risk factors. The manager is focusing on the comparable operational details and outcomes of risk assessments conducted using principal mapping, duration mapping, and cash-flow mapping methodologies.
A
Cash-flow mapping groups cash flows into buckets based on their size.
B
Cash-flow mapping uses the average rates in each risk group as a discount factor.
C
Principal mapping incorporates correlations among zero-coupon bonds.
D
Duration mapping replaces the portfolio with a zero-coupon bond with maturity equal to the duration of the portfolio.