Corridor width and interest rate futures

[richyrich006]

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?

[passme]

very interesting point. I wish to know too

[Level3Once]

1. 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%.

2. I am not sure what you mean. Can you rephrase?

[passme]

@richyrich006

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?

The underlying position is interest rate.