Series 7 - General Securities Representative Exam
A short term trader wants to benefit from an inverted yield curve that is expected to continue inversion. What might she do?
Buy short dated bonds buy longer term bondsA
Sell short dated bonds sell longer term bondsB
Sell short dated bonds buy longer term bondsC
Buy short dated bonds sell longer term bondsD
The trader could sell the near and buy the far. This form of arbitrage could work in an inverted yield curve environment