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Basic Question 10 of 10

Which one is a more 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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Craig Baugh

Craig Baugh

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.