Fixed income division of an investment bank

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Suppose you are an analyst working for the fixed income division of an investment bank. The goal of your department is to realize capital gain (besides interest income) from bond trading. There are two main ways to trade bonds: "Tong" (buy now and sell later) and "short" (sell now and buy it back later). Based on your forecast model, you believe the market interest rate will go up next week. Should you recommend buying more bonds now or selling existing bond holdings? To maximize profit should you recommend operating on long-term bonds or short-term bonds? Briefly explain why

Reference no: EM133083145

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