Risk and Reward Flashcards
1
Q
what is anomaly switching
A
exploiting mispricing in the bond market
2
Q
what is policy switching
A
exploiting market shifts caused by, for example, interest rate movements
3
Q
what is an inter-market switch
A
trading on the spread between a bond and its benchmark
4
Q
what is riding the curve
A
buying a longer-term cond than required and selling it before maturity
5
Q
what is cash matched/dedicated potfolios
A
matching cash flows of bonds to liabilities,
eliminates re-investment risk
6
Q
what is duration matching/immunisation
A
matching the duration of bonds to the liability
