Exam ICWIM Topic 1 Question 136 Discussion

Actual exam question for CISI's ICWIM exam
Question #: 136
Topic #: 1
A bullet bond portfolio can have an advantage over a barbell bond portfolio because:

Suggested Answer: D Vote an answer

* Bullet Bond Portfolio
* Invests in bonds with maturities focused on a single date or time period (a "bullet").
* This structure eliminates the need for frequent adjustments as maturities naturally align with portfolio objectives.
* Barbell Bond Portfolio
* Invests in bonds with very short and very long maturities.
* Requires regular rebalancing to maintain the intended allocation, increasing transaction costs.
* Why the Answer is D
* A bullet portfolio simplifies management by focusing on a single maturity period, avoiding the complexity of rebalancing inherent in barbell strategies.
* ICWIM Study Guide, Chapter on Fixed-Income Strategies: Compares bullet and barbell portfolios.
* Bond Portfolio Management Principles: Highlights the operational advantages of bullet structures.
References

by Xenia at Feb 08, 2026, 08:10 AM

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