If a pension fund manager is afraid interest rates may go down on his short-term portfolio of 90-day Treasury bills,he could hedge by going

Question

Quizplus · Accepted Answer

If interest rates go down, the price of Treasury bills will go up. By going long on Treasury bill futures contracts, the manager can profit from the increase in price, thus hedging against the risk of falling interest rates.

If a Pension Fund Manager Is Afraid Interest Rates May