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Assume that the yield curve currently is shaped as shown in YC 1 and that you anticipate it will be shaped as shown in YC

Assume that the yield curve currently is shaped as shown in YC

1

and that you anticipate it will be shaped as shown in YC

2

one year from now. In order to minimize interest rate risk, which of the following investment strategies would you recommend for clients, based on the current and anticipated shapes of the yield curves?

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