An active fund trader seeks to capitalize on an expected steepening of the current upward- sloping yield
Question:
An active fund trader seeks to capitalize on an expected steepening of the current upward- sloping yield curve using option-based fixed-income instruments. Which of the following portfolio positioning strategies best positions her to gain if her interest rate view is realized?
A. Sell a 30-year receiver swaption and a 2-year bond put option.
B. Purchase a 30-year receiver swaption and a 2-year bond put option.
C. Purchase a 30-year payer swaption and a 2-year bond call option.
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A Sell a 30year receiver swaption and a 2year bond put option To best position herself to gain from ...View the full answer
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