If the Yield on Mortgage-Backed Securities Was Abnormally Low Compared

question 21

Multiple Choice

If the yield on mortgage-backed securities was abnormally low compared to Treasury bonds, a hedge fund pursuing a relative value strategy would

• A) short sell the Treasury bonds and short sell the mortgage-backed securities.
• B) short sell the Treasury bonds and buy the mortgage-backed securities.
• C) buy the Treasury bonds and buy the mortgage-backed securities.
• D) buy the Treasury bonds and short sell the mortgage-backed securities.

---

Definitions:

Rectum

The final section of the large intestine, terminating at the anus, where feces are stored before being expelled.

Whole Wheat Bread

Bread made from flour that contains the entire grain kernel, offering more nutrients and fiber than white bread.

Bowel Elimination

The process by which waste material (feces) is expelled from the body through the rectum and anus.

Hard-Boiled Eggs

A cooking method for eggs that involves boiling them in their shells in water until the egg white and yolk solidify.