A bond portfolio manager sees that the yield curve will shift upward. She swaps her long-term for short-term bonds. This is an example of a

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A rate anticipation swap involves swapping one security for another with the anticipation of changing interest rates. Specifically, it involves a change in the duration of the portfolio. This is different from a pure yield pickup swap, which involves swapping one security for another with a higher yield, regardless of interest rate expectations. A substitution swap involves swapping one security for another with similar characteristics but a higher yield. A short sale swap involves a series of transactions that allow an investor to profit from a decline in the price of an underlying security.

A Bond Portfolio Manager Sees That the Yield Curve Will