To hedge a long position in Treasury bonds,an investor most likely would

Question

Quizplus · Accepted Answer

When an investor has a long position in Treasury bonds, they are exposed to the risk of interest rate movements. Selling interest rate futures provides a way to hedge against this risk by locking in a predetermined interest rate. As interest rates rise, the price of Treasury bonds falls, and the investor can profit from the short position in the futures market to offset the loss in the spot market. Therefore, selling interest rate futures is the best choice to hedge a long position in Treasury bonds.

To Hedge a Long Position in Treasury Bonds,an Investor Most