Question

The 'Riding the yield curve' strategy is executed by buying bonds whose maturities are:

1) Short-term
2) Medium-term
3) Long-term
4) All of the above

Answer 1

The 'Riding the yield curve' strategy involves buying bonds with different maturities to take advantage of changes in interest rates.

Step-by-step explanation:

The 'Riding the yield curve' strategy is executed by buying bonds whose maturities are: All of the above. This strategy involves purchasing bonds with different maturities to take advantage of changes in interest rates. Investors may buy short-term bonds when interest rates are expected to decrease and long-term bonds when rates are expected to rise.

Answer 2

The 'Riding the yield curve' strategy is executed by buying bonds whose maturities are 1) Short-term.

Step-by-step explanation:

The 'Riding the yield curve' strategy involves buying bonds with maturities that are short-term. This strategy is based on the belief that short-term interest rates are lower than long-term rates, and by holding short-term bonds, investors can benefit from higher yields. As time progresses and the short-term bonds approach maturity, the investor can reinvest in new short-term bonds, taking advantage of potential increases in interest rates.

In this strategy, the focus is on the short-term part of the yield curve, exploiting the yield differentials between short and long-term bonds. It's not about buying bonds with medium or long-term maturities. Therefore, option 1) Short-term is the correct choice.