More Carry trade
I was cruising until I got to carry trades. Now I have two posts on this and probably more after
Still on page 139-140.
We can eliminate currency exposure in an inter-market trade by receiving fixed/pay floating in the steeper market and pay fixed/receive floating in the flatter market.
Is the main reason for this because we can make up some of the loss from riding the yield curve? Is this correct as to why the carry is attractive even with currency risk?
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