Suppose That a Pension Fund Manager Knows That Bonds Must

question 13

Multiple Choice

Suppose that a pension fund manager knows that bonds must be liquidated in 40 days to make a $5 million payment to the beneficiaries of the pension fund. If interest rates rise in 40 days, more bonds will have to be liquidated to realize $5 million. The hedger will buy put options thus following ________.

• A) an unprotected call buying strategy.
• B) a protective put buying strategy.
• C) a protective put selling strategy.
• D) an unprotected put buying strategy.

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Definitions:

Strategic PR Objectives

Specific goals set by public relations professionals to guide communication efforts and measure success in influencing public perception and achieving organizational goals.

Corporate Strategy

The broad strategy and orientation of a company, along with how its different business units cooperate to accomplish specific objectives.

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The marketplace where a specific product is sold, encompassing the potential customers and competitors within that sector.

Workplace Giving

A program that enables employees to make charitable donations, often through payroll deductions, as part of a corporate social responsibility initiative.