Quiz Quickie (Relative Value Methodoligies-Fixed Income)

What are four rationales for secondary bond trades? What are three rationales for not trading? Name three types of spread analysis.

not trading - buy and hold strategies, cost, efficient markets(?) secondary bond trades - pick up yield, credit defensive, credit upgrade, new issues - I’m not sure this is what you are asking Spread analysis - Analytical , Historical & percentage of yield

yeild spread pickup sector rotation trade credit defense trade structure trades absolutely no idea oas nominal spread zero volatility spread

4 rationales- Yield Pickup, Sector Rotation, New Issues, Credit Adjustments Not Trading- Story Disagreement (still don’t know what that is), Buy and hold, ??? Cant remember the last one

Reasons to Trade Yield Pickup, Credit Upside, Credit Defense, New Issue Swap, Sector Rotation, Yield Curve Adj, Structure Trades, Cash Flow Reinvestment Not To Trade Story Disagreement - lack of consensus between buy and sell side (similar to anchoring), you don’t want to sell, but they think you should Buy and Hold - accounting constraints lead to unwillingness to trade or keep turnover low Seasonality - trading slows at end of reporting period Spread Analysis----Mean Reversion, Quality Spread analysis, and Percent Yield Analysis (which is the least preferred of the three)