Why is this? If the returns are lower, shouldn’t the risk premiums you receive for those bonds be lower as well?
E®-Rf = risk premium, when you are in a recession expected returns are typically higher owing to a lower valuation.
Why is this? If the returns are lower, shouldn’t the risk premiums you receive for those bonds be lower as well?
E®-Rf = risk premium, when you are in a recession expected returns are typically higher owing to a lower valuation.