How can a bond investor hedge against a possible bear market in bonds?

Question

Quizplus · Accepted Answer

Selling futures contracts on Treasury notes is a common strategy for bond investors to hedge against a possible bear market in bonds. The investor would profit from the decline in bond prices as the futures contracts would increase in value. Additionally, shorting bonds in the spot market can also serve as a hedge, but it requires more capital and carries more risk, making it a less preferable option compared to futures contracts. Buying futures contracts or going long in the spot market would not provide any protection against a bear market in bonds.

How Can a Bond Investor Hedge Against a Possible Bear