Explain why the dirty price of a bond might fall sharply before the next coupon is paid.

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"Inside the company fixed income managers bought bonds but they did not keep them for very long at all. Instead, they were constantly buying, exchanging and selling the bonds in their portfolios"

Explain why the behavior described in the quote may happen in terms of interest-rate risk immunization and downgrade risk?

Related Book For answer-question

Smith and Roberson Business Law

ISBN: 978-0538473637

15th Edition

Authors: Richard A. Mann, Barry S. Roberts

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Posted Date: Apr 26, 2023 06:31 AM

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Explain why the dirty price of a bond might fall sharply before the next coupon is paid.

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The dirty price of a bond might fall sharply before the next coupon is paid if interest rates increa... View the full answer

Smith and Roberson Business Law

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