A Bond Portfolio Manager Notices a Hump in the Yield

question 25

Multiple Choice

A bond portfolio manager notices a hump in the yield curve at the five 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:

Prostatic Hypertrophy

An enlargement of the prostate gland, often seen in older men, which can cause urinary problems by exerting pressure on the urethra.

Hematuria

The presence of blood in urine, indicating possible urinary tract disease or injury.

Urinary Stream

The flow of urine during urination.

Zygote

refers to the initial cell formed when a sperm cell fertilizes an egg, marking the beginning of a new organism.