You find a 5-year AA Xerox bond priced to yield 6%. You find a similar-risk 5-year Canon bond priced to yield 6.5%. If you expect interest rates to rise, which of the following should you do?
A) Short the Canon bond, and buy the Xerox bond.
B) Buy the Canon bond, and short the Xerox bond.
C) Short both the Canon bond and the Xerox bond.
D) Buy both the Canon bond and the Xerox bond.
Correct Answer:
Verified
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