Multiple Choice
If the yield on mortgage-backed securities was abnormally low compared to Treasury bonds, a hedge fund pursuing a relative value strategy would
A) short sell the Treasury bonds and short sell the mortgage-backed securities.
B) short sell the Treasury bonds and buy the mortgage-backed securities.
C) buy the Treasury bonds and buy the mortgage-backed securities.
D) buy the Treasury bonds and short sell the mortgage-backed securities.
Correct Answer:
Verified
Correct Answer:
Verified
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