CTP Exam Dumps | A portfolio manager would like to purchase U.S. 50 million of 10-year notes 3 months from now, but has

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Question 96/279

A portfolio manager would like to purchase U.S. 50 million of 10-year notes 3 months from now, but has heard news that the Federal Reserve will start a purchasing program of longer term treasuries that will include 10-year notes. The purchase program would likely cause a lowering of market interest rates. The manager would also like to avoid having to use margin on a daily basis. To remove the price risk that may be associated with the Federal Reserve purchasing program, the portfolio manager would MOST LIKELY enter into an:

A. interest rate futures contract.

B. interest rate swap.

C. interest rate collar.

D. interest rate forward contract.

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