A money manager holds $50 million worth of top-quality international bonds denominated in dollars. Their face value is $40 million, and most issues are highly illiquid. She fears a rise in U.S. interest rates and decides to hedge, using U.S. Treasury bond futures. Why would it be difficult to achieve a perfect hedge (list the various reasons)?

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The Answer of A money manager holds $50 million worth of top-quality international bonds denominated in dollars. Their face value is $40 million, and most issues are highly illiquid. She fears a rise in U.S. interest rates and decides to hedge, using U.S. Treasury bond futures. Why would it be difficult to achieve a perfect hedge (list the various reasons)?

A Money Manager Holds $50 Million Worth of Top-Quality International