Statement: “our research team anticipates that the credit fundamental of most issuers will deteriorate over the coming months as the economy contracts. The market consensus is not in line with our view yet and spreads do not reflect the proper valuation.”

Q: The strategy that is most likely to benefit from the environment described in the above statement can be best described as:

A. credit-upside trades B. sector-rotation trades C. curve-adjustment trades

a. credit upside


I’d go with A but I don’t know the meaning of A or C. B doesn’t seem to apply since the team thinks “most issuers” will decline (it doesn’t specify that cyclical-only will decline). C seems to infer that the team has opinions on the fundamentals of specific maturities (ex. ST issues will suffer more/less than LT), although I could see how declining spreads might affect the long-end more than the ST-end, so maybe it’s C? I don’t know, A just seems to make the most sense, but I don’t know what a credit-upside trade even is.

nashwbe - if you are just trolling the site - please stop at this time. Please come back a month later … and have all the fun you want.

we need to get some structure around our final preparation and it does not help with trying to explain things to you in real earnest… sometimes it just gets overwhelming.

this is the 3rd time since yesterday when you have said things like “I do not understand it… but here goes…” and so on… which makes me suspect that you are here for fun.

Thanks for understanding…

Credit defence should have been as an answer…

agree with rahuls - but since not given, go with C since you would shift to shorter term duration securities

cpk, I think you misunderstand me, perhaps due to a language barrier. Not trolling at all.

C is the answer.

Curve-adjustment includes credit curve adjustment.

Thats a bullshit question if i do say so.