Which of the following statements best describes the forward rate bias? A. Investors tend to favor fixed-income
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Which of the following statements best describes the forward rate bias?
A. Investors tend to favor fixed-income investments in currencies that trade at a premium on a forward basis.
B. Investors tend to hedge fixed-income investments in higher-yielding currencies given the potential for lower returns due to currency depreciation.
C. Investors tend to favor unhedged fixed-income investments in higher-yielding currencies that are sometimes enhanczed by borrowing in lower-yielding currencies.
A financial analyst at an in-house asset manager fund has created the following spreadsheet of key rate durations to compare her active position to that of a benchmark index so she can compare the rate sensitivities across maturities.
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Forward rate bias refers to the tendency of investors to favor certain types of fixedincome investme...View the full answer
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