Is corridor width an absolute or relative term. 40%+/-10% is 30-40% or 36%-44%. I’ve seen it both ways for some reason
Is interest rate futures bought to hedge a bond based on the bond price or the interest rate?
Is corridor width an absolute or relative term. 40%+/-10% is 30-40% or 36%-44%. I’ve seen it both ways for some reason
Is interest rate futures bought to hedge a bond based on the bond price or the interest rate?
very interesting point. I wish to know too
It can be either. If they say “corridor widths are 10%” - that is just an absolute 10%. If they say “corridor widths are 10 % of the strategic asset allocation” it is 10% of the 40%, or in your case 4%.
I am not sure what you mean. Can you rephrase?
The underlying position is interest rate.