Suppose that your portfolio consists of a $200K long position in the GM bond and a $100K cash position and suppose the bond's Macaulay duration is 4.86. Additionally, you can invest into the Italian government bond that matures in 2039, has a yield of -0.14%, and a Macaulay duration of 16.2 years. Suppose you think that this Italian bond is a terrible deal. 

What trade would bet against the bond and immunize your portfolio against a parallel shift in interest rates today?

Answer rating: 100% (QA)

To immunize your portfolio against a parallel shift in interest rates today you would need to take a ... View the full answer