A bond portfolio manager has a $25 million market value bond portfolio with a six-year...
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Accounting
A bond portfolio manager has a $25 million market value bond portfolio with a six-year duration. The manager believes interest rates may increase 50 basis points. Which of the following could be used to help limit his risk?
I. Sell put options on the bonds.
II. Buy bond futures contracts.
III. Buy call options on the bonds.
IV. Buy put options on the bonds.
Multiple Choice
IV only
II only
I and III only
I and IV only
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