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Let us assume you have developed a model for the US economy that is 100% accurate. It tells you that the US economy will be
Let us assume you have developed a model for the US economy that is 100% accurate. It tells you that the US economy will be in a recession in 8 months. You look in the WSJ and see that the yield to maturity of a 30 day Treasury bill is 1% and the yield to maturity of a 10 year Treasury Bond is 8%. If you are a long/short fixed income portfolio manager you should:
A. Go Long both securities
B. Go Short both securities
C. Buy the 10 Year bond, short the bill
D. Buy the 30 day bill and short the 10 year bond
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