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Question
A portfolio manager is concerned that the expected drop in interest rates is going to lower the yield on the $1,000,000 of T-Bill she plans to buy in 3 months. She can hedge this potential interest rate risk bya. taking a short position in 3-month T-bill futures.
b. taking a long position in 3-month T-bill futures.
c. buying a call option on 3-month T-bill futures.
d. buying a put option on 3-month T-bill futures.
e. Either b or c would work.
Answer
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Related questions
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