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Author Question: How can a bond investor hedge against a possible bear market in bonds? A) sell futures contracts ... (Read 399 times)

Bob-Dole

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on: Jun 30, 2018
How can a bond investor hedge against a possible bear market in bonds?
 
  A) sell futures contracts on Treasury notes
  B) buy futures contracts on Treasury notes
  C) going long in the spot market
  D) going short in the spot market

Question 2

In November 2012, concern was raised about Spain's sovereign debt. Make use of a graph of the bond market to show how this would affect the price of Spanish bonds.
 
  What will be an ideal response?


frogdreck123456

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Reply #1 on: Jun 30, 2018
Answer to Question 1

A

Answer to Question 2

Fear about the ability of Spain to make payments on its bonds will reduce the demand for Spanish bonds, leading to a decline in the price of Spanish bonds.


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