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Basic Question 10 of 10
Which one is a more useful consumption hedge for investors?
B. A short-term government bond
C. Neither type of bond can serve as a useful consumption hedge for investors.
A. A long-term government bond
B. A short-term government bond
C. Neither type of bond can serve as a useful consumption hedge for investors.
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Learning Outcome Statements
explain how the phase of the business cycle affects policy and short-term interest rates, the slope of the term structure of interest rates, and the relative performance of bonds of differing maturities;
describe the factors that affect yield spreads between non-inflation-adjusted and inflation-indexed bonds;
CFA® 2025 Level II Curriculum, Volume 6, Module 37.