This is an outlier question, or an eas…? I have no idea what it’s talking about when I saw it. Wish it’s a level 2 question.
Foward inteest rates can be used to derive the strategic bond allocation by increasing exposure to markets where the expected bond yield is farthest above the forward yield.
True or false?
not 100% sure what this is asking, but i’m going to guess that its false, because reaching for the highest yield possible is absolutely stupid
schweser mentioned that most commong bond trade is yield pickup
Not clear but i would say True for the win
What i can think of is forward interest rate are the implied expected spot rate. Now compare with the expected bond yield (i.e. implied expected market rates) & increase the exposure to markets where this difference is maximum.