A bond portfolio manager has a $25 million market value bond portfollo with a six-year duration. The manager believes interest rates may increase 50 basis points, Which of the following could be used to help limit his risk? 1. 1. Sell the bonds forward. 2. II. Buy bond futures contracts. 3. IlII, Buy call options on the bonds. 4. IV. Buy put options on the bonds. O l only O Il only O l and III only O l and IV only
A bond portfolio manager has a $25 million market value bond portfollo with a six-year duration. The manager believes interest rates may increase 50 basis points, Which of the following could be used to help limit his risk? 1. 1. Sell the bonds forward. 2. II. Buy bond futures contracts. 3. IlII, Buy call options on the bonds. 4. IV. Buy put options on the bonds. O l only O Il only O l and III only O l and IV only
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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A bond portfolio manager has a $25 million market value bond portfollo
with a six-year duration. The manager believes interest rates may increase
50 basis points, Which of the following could be used to help limit his
Attempt due: Jun 25 at 11:59pm
2 Minutes, 13 Seconds
risk?
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1. 1, Sell the bonds forward.
2. II. Buy bond futures contracts.,
3. IlII, Buy call options on the bonds,
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4, IV. Buy put options on the bonds.
O Phone
O lonly
O Il only
O l and III only
O l and IV only
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