Swaps, forwards and Futures

CFA Level III
#1

Kindly provide your expert on why Option 2 : Enter into a receive Fixed 10 year interest Swap is wrong in the below question *(Book Volume 2 Question 1 of page 124 of CFA level 3 )

*A US bond portfolio manager wants to hedge a long position in a 10-year
Treasury bond against a potential rise in domestic interest rates. He would most
likely:

A sell fixed-income(bond) futures.**
B enter a receive-fixe10-year interest rate swap.**

C sell a strip of 90-day Eurodollar futures contracts.**

#2

A receive fixed, pay floating swap has positive duration. It would exaggerate the problem, not mitigate it.

#3

Thank u

#4

My pleasure.

#5

Why is C wrong then? Thank you!

#6

It is due the the maturity issue.
10 year bond versus short term interest rate futures.

#7

Thank you very much, @MikeyF!

#8

to add to S2000magician’s post,

if he’s long the 10 year Treasury bond, he’s already receiving fixed because the amounts of the coupons are known.
If he wanted to do it with a swap, it would be pay-fixed, receive-floating