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Why is the one year yield even higher? I thought two year is higher risk? Opportunity for arbitrage here? http://www.bloomberg.com/apps/quote?ticker=GGGB1YR:IN
by teyc 15y ago
Why is the one year yield even higher? I thought two year is higher risk? Opportunity for arbitrage here?
http://www.bloomberg.com/apps/quote?ticker=GGGB1YR:IND http://www.bloomberg.com/apps/quote?ticker=GGGB1YR:IND
- _delirium 15y agoThere are certain risk profiles where it'd make sense. For example, if you think that a default is most likely to happen within the next 6 months or not at all, then the 2-year bond has about the same default risk as the 1-year bond, but locks in the high interest rate for longer, so has more potential upside.