You Are Interested in Hedging a Portfolio of Bonds Against

question 34

Multiple Choice

You are interested in hedging a portfolio of bonds against a rise in interest rates. Which of the following approaches will be most suitable to your goal?

• A) Selling deep ITM vanilla call options and buy deep ITM vanilla put options.
• B) Selling deep OTM vanilla call options and buy deep OTM vanilla put options.
• C) Selling deep ITM cash-or-nothing calls and buy deep OTM cash-or-nothing calls.
• D) None of the above.

Differentiate between substantive and relationship goals in negotiations.

Understand the principles and importance of integrative negotiation.

Recognize common pitfalls in negotiation and strategies to avoid them.

Understand the effects of negotiation outcomes on ongoing relationships.

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