-Suppose you are the owner of a large portfolio of long-termbonds in the health care industry and you believe that in the nextthree years, all healthcare will be socialized to the publicsector. You anticipate that the profits of most healthcarecompanies will suffer immensely from this new path. If the marketagrees with your assessment of the future, what would youanticipate would be the near term consequences for your bondportfolio? Why would this happen and why now, when the change tosocialized medicine is three years away? How could you use optionson these bonds to guard against lose?
