Subject category:
Finance, Accounting and Control
Published by:
Harvard Business Publishing
Version: 28 June 1995
Length: 9 pages
Data source: Published sources
Abstract
Documents a pricing anomaly in the large and liquid treasury bond market. The prices of callable treasury bonds seem to be inconsistent with the prices of noncallable treasuries and an arbitrage opportunity appears to exist. Permits instructors to introduce the treasury market, the concept of creating synthetic instruments, principles of arbitrage, and institutional frictions in the bond markets.
Subject category:
Finance, Accounting and Control
Published by:
Harvard Business Publishing
Length: 10 pages
About
Abstract
Documents a pricing anomaly in the large and liquid treasury bond market. The prices of callable treasury bonds seem to be inconsistent with the prices of noncallable treasuries and an arbitrage opportunity appears to exist. Permits instructors to introduce the treasury market, the concept of creating synthetic instruments, principles of arbitrage, and institutional frictions in the bond markets.
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Subject category:
Finance, Accounting and Control
Published by:
Harvard Business Publishing
Length: 10 pages