Suppose you are a strategist for a hedged fund. Your research indicates that the spread between BBB bonds and AAA bonds is 150 bps in periods of economic slowdown and only 100 bps in periods of economic expansion. Currently, the economy is in recession, and 1- and 2-year zero-coupon bonds for AAA and BBB bonds are trading at 6% and 7.5%. Leading indicators, though, strongly point to the economy hitting its through relatively soon and then expanding over the next year. Construct a portfolio to benefit from the forecast. Buy both bonds Sell both bonds Sell BBB bonds and Buy AAA bonds Sell AAA bonds and Buy BBB bonds