Which of the following bond strategies involves no expectations about market changes but involves selling a lower yield bond in order to purchase a higher yielding bond of the same quality and maturity to obtain the higher yield?
A) substitution swap
B) pure yield pickup swap
C) rate anticipation swap
D) intermarket spread swap

Question

Quizplus · Accepted Answer

A pure yield pickup swap involves selling a bond with a lower yield and purchasing a bond with a higher yield of the same quality and maturity, without any expectation of changes in the interest rate market. This strategy aims to increase the portfolio's yield.

Which of the Following Bond Strategies Involves No Expectations About