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3) You have started your own investment house. You observe that 5 year bonds sell for 4.5 percent, while 4.75 year bonds sell for 4.6
3) You have started your own investment house. You observe that 5 year bonds sell for 4.5 percent, while 4.75 year bonds sell for 4.6 percent. You know for sure for sure that in 6 months they will converge to some amount X. You can go short $300 million face any asset. Graphs your profits as X goes from 4 to 8 percent. 3) You have started your own investment house. You observe that 5 year bonds sell for 4.5 percent, while 4.75 year bonds sell for 4.6 percent. You know for sure for sure that in 6 months they will converge to some amount X. You can go short $300 million face any asset. Graphs your profits as X goes from 4 to 8 percent
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