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.

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Definitions:

Body Image

A person's perception of the aesthetics or sexual attractiveness of their own body, which may or may not align with societal standards.

Bulimic

Refers to an individual suffering from bulimia, an eating disorder characterized by episodes of binge eating followed by behaviors to prevent weight gain.

Binge Meal

A pattern of eating where large amounts of food are consumed in a short period, often associated with feelings of loss of control over eating.

Steak

A slice of meat, typically beef, that is usually grilled, pan-fried, or broiled.