Question
A bank's investment manager must invest $30 million today in U.S. Treasury securities.This manager also feels that the Treasury yield curve is going to shift
A bank's investment manager must invest $30 million today in U.S. Treasury securities.This manager also feels that the Treasury yield curve is going to shiftdownwardin the near future, and short, medium, and long-term rates are forecasted to fall by 0.5%.Given this interest rate forecast what bond investment strategy should the investment manager follow today.
A.Invest in short-term TreasuriesB.Instead of buying actual Treasury bonds, just sell (short) Treasury bond futures contractsC.Invest in long-term TreasuriesD.Invest the money in CDOs, as they're less riskyE.Delay investing until after rates have fallen.
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