If a Yield Curve Is Upward Sloping, the Investment Strategy

question 4

Multiple Choice

If a yield curve is upward sloping, the investment strategy of buying long-term securities, then selling them after a short period (say, one year) is called

• A) riding the yield curve.
• B) liquidating the yield curve.
• C) segmenting the yield curve.
• D) a forward roll.
• E) none of the above

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Definitions:

Competition

The rivalry between businesses or individuals for customers, market share, or achievement within an industry, sport, or another domain.

Utility

The total satisfaction or benefit derived from consuming a product or service.

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Benefits

Advantages or positive outcomes that satisfy the needs or wants of consumers or stakeholders.