Assume that you manage a 100mil bond port with duration of 1.5year. You wish to increase the bond duration to 3.5 year using swap. Assume the duration of fixed rate bond is 75% of its maturity.
A (answer) we enter as a receiver fixed rate swap
B. Would you prefer a four-year swap with quarterly payment or 3 year swap with semiannual payment???
WTF is the question? any one explain the reason why ?