A portfolio manager believes interest rates will drop and decides to sell short-duration bonds and buy long-duration bonds. This is an example of ________ swap.

A) a pure yield pickup
B) a rate anticipation
C) a substitution
D) an intermarket spread

Interest Rates

The expense associated with obtaining a loan, represented as a percentage of the total loan value, usually calculated on a yearly basis.

Short-Duration Bonds

Bonds with a relatively short time to maturity, typically less than five years, which are less sensitive to interest rate changes compared to longer-duration bonds.

Long-Duration Bonds

Bonds with a long time remaining until maturity, typically more sensitive to interest rate changes and offering potentially higher yields.