Can you please explain the meaning of hilighted part.
Sir me btaya thaa ki future spot rates will be equal to today’s spot rates.
I am confused that what is difference between this strategy and passive buy and hold strategy – waha bhi likha thaa ki spot rates will evolve as per forward rates
Look the difference is that the rolling yield curve strategy is the strategy in which the say after the 5 year the spot rate curve is look a like as today’s spot curve. Where as the 2nd one is u asked is the pure expectations theory in which we are confident that the today’s forward rate are the actual spot rate of future.
Hope it helps!
Then picture m aisa kyu likha h ki spot rates rise as per forward rates in riding the yield curve theory
It is written that spot curve rise as predicted by forward curve which give to show us that spot curve is upward sloping and you know only if the spot curve is upward sloping then we use the ride the yield curve strategy.