From Kaplan Exam 2 Afternoon MC no.26
The plan trustee believe interest rates will increase over nxt year while credit spreads will narrow.
Why a benchmark with more corporate credit exposure reflects this view? Thanks.
From Kaplan Exam 2 Afternoon MC no.26
The plan trustee believe interest rates will increase over nxt year while credit spreads will narrow.
Why a benchmark with more corporate credit exposure reflects this view? Thanks.
my thinking would be that a narrowing the credit spread and increasing interest rate reflect a positive view on economic perspective and tightening monetary policy, under such circumstance the corporate fixed income would do better than the safer government bond, i could be wrong