Question

A portfolio manager sells Treasury bonds and buys corporate bonds because the spread between corporate- and Treasury-bond yields is higher than its historical average. This is an example of ________ swap.

Answer 1

Answer: The correct answer is "an intermarket spread".

Explanation: This is an example of an intermarket spread swap.

• An intermarket spread swap, is the exchange of 2 bonds within different parts of the same market in order to obtain a higher yield.