The par/par methodology therefore allows an investor to be exposed only to the idiosyncrasies of the bond issuer rather than taking interest rate risk. Why no interest rate risk?
Answer
when you receive LIBOR based cashflows rather than fixed cashflows, there is no interest rate risk.
The par/par methodology therefore allows an investor to be exposed only to the idiosyncrasies of the bond issuer rather than taking interest rate risk. Why no interest rate risk?
The par/par methodology therefore allows an investor to be exposed only to the idiosyncrasies of the bond issuer rather than taking interest rate risk. Why no interest rate risk?
Answer
when you receive LIBOR based cashflows rather than fixed cashflows, there is no interest rate risk.
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Open it The par/par methodology therefore allows an investor to be exposed only to the idiosyncrasies of the bond issuer rather than taking interest rate risk - when you receive LIBOR based cashflows rather than fixed cashflows, there is no interest rate risk. (There is a small residual interest rate risk due to the difference between the disc
The par/par methodology therefore allows an investor to be exposed only to the idiosyncrasies of the bond issuer rather than taking interest rate risk - when you receive LIBOR based cashflows rather than fixed cashflows, there is no interest rate risk. (There is a small residual interest rate risk due to the difference between the disc
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