A US investor is thinking of buying a 5y Canadian bond as it yields 175 bps higher
Fantastic news! We've Found the answer you've been seeking!
Question:
A US investor is thinking of buying a 5y Canadian bond as it yields 175 bps higher than the corresponding by US bond. The investor has a horizon of 3 months and the duration of the bonds is 4.2 for the Canadian bond and 3.9 for the US bond. How much would the spread between the yields of the US and Canadian bonds have to change in bps for the investor to be better off having purchased the US bonds?
Related Book For
Accounting concepts and applications
ISBN: 978-0538745482
11th Edition
Authors: Albrecht Stice, Stice Swain
Posted Date: