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

Question

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To hedge a short position in Treasury bonds, an investor would want to protect themselves against potential losses if interest rates were to rise. Buying interest rate futures would provide a way to offset those potential losses. Ignoring interest rate futures or buying S&P futures would not directly address the risk associated with the short Treasury bond position. Selling Treasury bonds in the spot market would simply increase the short position and not provide any hedge against potential losses.

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