When all Treasury issues are used to construct the theoretical spot rate curve, what methodology is used to construct the curve?
Answer to relevant QuestionsAnswer the below questions. (a) What are the limitations of using Treasury strips to construct the theoretical spot rate curve? (b) When Treasury strips are used to construct the curve, why are only coupon strips used? Bart Simpson is considering two alternative investments. The first alternative is to invest in an instrument that matures in two years. The second alternative is to invest in an instrument that matures in one year and at the ...Why is an option-adjusted spread more suitable for a bond with an embedded option than a yield spread? In a Treasury auction, how is the price that a noncompetitive bidder must pay determined in a single-price auction format? What is the when-issued market?
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