lucasg85

cpk123 Wrote:
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> that is right.
> bond price is inversely related to rates. rate
> goes up, price goes down. If you are long the
> bond, that is good for you.
>
> that is what messed me up too, when I wrote the
> answer initially.
>
> in this question - you are short the bond. so you
> want rates to go down. It would be bad if rates
> went up, since you sold the bond. If rates went
> up, you want them to go up only very little. so
> you need to buy an Interest rate CAP!...

Sorry I still am not catching you on this. If I own the bond, why would I want rates to go up since my bond will go down in value...???