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What should I buy if the Fed is raising rates due to a strong economy and...

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Finance

What should I buy if the Fed is raising rates due to a strongeconomy and the government is cutting taxes?

  1. Treasury Bonds
  2. Medium term higher yield corporate bonds
  3. Longer term Municipal bonds
  4. 20 yr below investment grade bond

3. T/F General obligation muni bonds are backed by the fullfaith and credit of the issuing state

4. T/F If I have a an investment horizon of 7 years, I canimmunize my interest rate risk in my bond portfolio by targeting aduration of 7

Answer & Explanation Solved by verified expert
4.0 Ratings (647 Votes)
SOLUTION Treasury bond TBond A Treasury bond TBond is a marketable fixedinterest US government debt security with a maturity of more than 10 years Treasury bonds make interest payments semiannually and the income received is only taxed at the federal level Treasury bonds are known in the market as primarily riskfree they are issued by the US government with very little risk of default    See Answer
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Transcribed Image Text

What should I buy if the Fed is raising rates due to a strongeconomy and the government is cutting taxes?Treasury BondsMedium term higher yield corporate bondsLonger term Municipal bonds20 yr below investment grade bond3. T/F General obligation muni bonds are backed by the fullfaith and credit of the issuing state4. T/F If I have a an investment horizon of 7 years, I canimmunize my interest rate risk in my bond portfolio by targeting aduration of 7

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