n NISM Certifications
NSM General NISM
Medium

How can a person holding a fixed income security hedge his position?

Practice question from NISM Series IV - Mock Test 2 — bank. The correct answer is highlighted below with a full explanation.

Options

  1. A

    By Buying GOI bond call option

  2. By Selling GOI bond futures

    Correct answer

  3. C

    Both of the above

  4. D

    None of the above

Why this is the answer

Selling bond futures allows hedging against falling bond prices due to rising interest rates.

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