Rate anticipation is: (a) Investing the same amount in long term bonds in a rolling period; (b) Buying short-term and long-term bonds and short intermediate-term bonds; (c) Mimicking the portfolio of a bond index; (d) Buying under-priced bonds using various bond pricing models.; (e) Betting on future Interest rate movement
Rate anticipation is:
Answer:
b) Buying short-term and long-term bonds and short intermediate-term bonds
Explainatin
Rate anticipation is generally make to take the advantage of change in the interest rate
Eample : Investor who think that interest rates were about to fall will swap shorttermbond for long term because it will give higher return
