A Bond Portfolio Manager Believes That Interest Rates Are About

question 88

True/False

A bond portfolio manager believes that interest rates are about to increase. Given this belief, the manager should buy long duration bonds and sell short duration bonds.

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Definitions:

Allocative Efficiency

A state of resource allocation where it is impossible to make any one individual better off without making someone else worse off.

Private Ownership

The legal right held by individuals or corporations to have exclusive control over and use of property, assets, or commodities.

Opportunity Cost

Opportunity cost is the value of the next best alternative forgone as the result of making a decision.

Henry George

A 19th-century economist known for his belief that people should own the value they produce themselves, but that land and natural resources should belong to all (Georgism).