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The main goal of this book is to promote a broader use of multi-factor models for managing the risks of fixed-income portfolios. The final chapter of the book supports this use by summarizing the theoretical arguments and empirical evidence presented in the main chapters of the book. We express the view that the finance industry has still a long way to go for taking full advantage of multi-factor analyses in the management of bond portfolios. For portfolios of high credit quality, what is needed in most cases is just an adequate controlling of model risk exposure, which implies relatively straightforward extensions of traditional hedging equations. For portfolios of lower credit quality, the availability of liquid credit derivatives displaying a lower basis risk than non-collateralized CDS is necessary for effectively facing phases of significant market disruption.
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