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A portfolio manager believes interest rates will drop and decides to sell short-duration bonds and buy long-duration bonds. This is an example of _____________ swap. a. a pure yield pickup b. a substitution
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A portfolio manager believes interest rates will drop and decides to sell short-duration bonds and buy long-duration bonds. This is an example of _____________ swap.

a. a pure yield pickup
b. a substitution
c. a rate anticipation
d. an intermarket spread

User Jim Hudson
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1 Answer

9 votes
9 votes

Answer:

C) a rate anticipation

Step-by-step explanation:

A rate anticipation swap can be regarded as a bond trading strategy that is used whereby there is exchange of exchanges of bond portfolio by trader in anticipation of expected interest rate movements.

Rate anticipation swap can be regarded as trading strategy involving

bonds swapping on the basis of varying maturity dates. this bond swapping are done according to their present period as well as their movement rate prediction.

User Zapcost
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