A Bond Portfolio Manager Notices a Hump in the Yield

question 59

Multiple Choice

A bond portfolio manager notices a hump in the yield curve at the 5-year point. How might a bond manager take advantage of this event?

• A) Buy the 5-year bonds, and short the surrounding maturity bonds.
• B) Buy the 5-year bonds, and buy the surrounding maturity bonds.
• C) Short the 5-year bonds, and short the surrounding maturity bonds.
• D) Short the 5-year bonds, and buy the surrounding maturity bonds.

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Definitions:

Sexism

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Legislation in the United States that outlaws discrimination based on race, color, religion, sex, or national origin, initially established in 1964.

Sexual Harassment

Unwanted sexual advances or remarks that create a hostile or offensive work environment.