Question: A company invests in short - term notes yielding a 3 % return, and plans to reinvest the principal in 9 0 days. The company

A company invests in short-term notes yielding a 3% return, and plans to reinvest the principal in 90 days. The company wants to hedge against the possibility that interest rates will be lower at that time. If the interest rate on U.S. Treasury bills is highly correlated with the yield on the notes, which investment is an effective hedge?

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