Question

RBI governor reduced the SLR by 50 bps. As a bond trader what shall be your trading strategy?

Select one:
a. Sell Bonds as yields will go down
b. Buy Bonds as yield will go up
c. Buy Bonds as yields will go down
d. Sell Bonds as yields will go up

Answer 1

answer is buy bonds as yields will go up

Answer 2

After RBI governor reduced the SLR by 50 bps, among the options Sell Bonds as yields will go down; buy Bonds as yield will go up; buy Bonds as yields will go down; sell Bonds as yields will go up, the correct option would be Option B, ‘buy Bonds as yields will go up’.

Hence, as a bond trader my trading strategy would e to buy Bonds as the yields will go up.