Question
Which of the following strategies can be implemented in falling interest rate environment to hedge the interest rate risk (select as many as applicable)? Please
Which of the following strategies can be implemented in falling interest rate environment to hedge the interest rate risk (select as many as applicable)? Please explain your logic in a concise way. 1. Buy short-term and long-term bonds 2. Sell long term bonds and buy short term 3. Buy long term bonds and sell short term 4. Sell a fixed coupon bond and enter a swap receiver position 5. Buy a fixed coupon bond and enter a swap payer position 6. Buy the corporate bond and sell the matching maturity government bond 7. Buy a CDS 8. Sell a CDS 9. Receive a total return swap 10. Pay a total return swap
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