A portfolio manager sells treasury bonds and buys corporate bonds because the spread between corporate and Treasury bond yields is higher than its historical average.This is an example of __________ swap.

Question

Quizplus · Accepted Answer

This is an example of an intermarket spread swap, where the manager is taking advantage of the yield spread between different markets, in this case, corporate and Treasury bonds.

A Portfolio Manager Sells Treasury Bonds and Buys Corporate Bonds