Chartered Financial Analyst Level 2
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57 A portfolio manager expects the current upward sloping yield curve to flatten due to a decrease in long-term rates. The manager is considering the following bonds, all with a 5% coupon rate and ten years left to maturity:
- Bond A: putable bond
- Bond B: callable bond
- Bond C: straight bond
All else being equal, the strategy that would benefit the most from the manager's expectation is to:
57 A portfolio manager expects the current upward sloping yield curve to flatten due to a decrease in long-term rates. The manager is considering the following bonds, all with a 5% coupon rate and ten years left to maturity:
- Bond A: putable bond
- Bond B: callable bond
- Bond C: straight bond
All else being equal, the strategy that would benefit the most from the manager's expectation is to:
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