Sir made us write that in bull steepener we should be overexposed to long term and underexposed to short term but when yields are falling and short term yields are falling more so shouldn’t we be overexposed to short term?
Share
Please briefly explain why you feel this question should be reported.
Please briefly explain why you feel this answer should be reported.
Please briefly explain why you feel this user should be reported.
Yes, we should be overexposed to short term, since in the case of Bull Steepener, short term rates fall at a faster rates than Long Term Rates. So, if that is our view, we should be overexposed to short term.