Can someone explain how under Riding the yeild cuvre theory with the passage of time yeilds are falling (mentioned in the last line)
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Aditya Raj ChauhanAdvanced
High-yield bonds are more sensitive to the credit cycle, however, and can have a more upwardly sloped term structure of credit spreads than investment-grade bonds or even an inverted curve. Please explain Why ?
Aditya Raj ChauhanAdvanced
The cash dividend is higher than the threshold dividend, which will typically result in a reduction in the conversion price, which results in an increase in the conversion ratio. Please Explain the above >
Aditya Raj ChauhanAdvanced
The effective duration of a floating-rate bond is close to the time to next reset Please explain the above ?
Aditya Raj ChauhanAdvanced
Please explain difference between credit spread and & CDS Spread ? How difference between the two is used in basis trade ?
Aditya Raj ChauhanAdvanced
Consistent with Jones’s statement, equilibrium term structure models require fewer parameters to be estimated relative to arbitrage-free models, and arbitrage-free models allow for time-varying parameters. Consequently, arbitrage-free models can model the market yield curve more precisely than equilibrium models. Please Explain ...
Aditya Raj ChauhanAdvanced
When government budget deficits fall, fiscal supply-side effects are most likely to result in lower bond yields. Please Explain the above para ?
YatharthAdvanced
Q. Is Ikeda most likely correct in his discussion of the term structure of credit spreads? Yes No, he is incorrect with regard to the typical term structure of credit spreads. No, he is incorrect with regard to the examples he gives. (Answer- A) Isn’t Example ...
YatharthAdvanced
Isn’t Statement 1 Incorrect? When credit migration happens- the Risk and CVA on the bond increases and hence we realize higher return for higher risk. But Solution says that only Statement 2 is incorrect
