Patrick is a portfolio manager for the Hyper Tally Growth Fund. It has generated an annualized rate of return of 10% this past year. However, with the anticipation of very high inflation to soon occur, there is also an expectation of higher interest rates. Patrick is concerned about the future returns of existing stocks within the fund. What may Patrick do to protect against the market value of the fund dropping? O Purchase put options for the fund's existing assets. O Agree to buy forward contracts where he is in the "long" position. O Buy call options for the existing stocks stored within the fund. O Avoid the use of derivatives because they are speculative in nature.
Patrick is a portfolio manager for the Hyper Tally Growth Fund. It has generated an annualized rate of return of 10% this past year. However, with the anticipation of very high inflation to soon occur, there is also an expectation of higher interest rates. Patrick is concerned about the future returns of existing stocks within the fund. What may Patrick do to protect against the market value of the fund dropping? O Purchase put options for the fund's existing assets. O Agree to buy forward contracts where he is in the "long" position. O Buy call options for the existing stocks stored within the fund. O Avoid the use of derivatives because they are speculative in nature.
Chapter1: Making Economics Decisions
Section: Chapter Questions
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