An instrument is traded with dollar duration equal to -1342, Financial Management

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An instrument is traded with dollar duration equal to -1342

Assume that you manage a bond portfolio. The Dollar duration of the portfolio is -6,710,000. An instrument is traded with dollar duration equal to -1,342. To make the portfolio duration neutral you need to...

Buy 1342 units of the hedging instrument.

Short sell 5000 units of the hedging instrument.

Short sell 1342 units of the hedging instrument.

Buy 5000 units of the hedging instrument.

Please explain why you would choose to short sell instead of buy or vice versa.

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Financial Management: An instrument is traded with dollar duration equal to -1342

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Financial Management: An instrument is traded with dollar duration equal to -1342

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