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5 Fixed Income Sectors Assume that the economy goes into a recession. Assume that the corporate credit spread rises more than Treasury bond rates decline
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Fixed Income Sectors Assume that the economy goes into a recession. Assume that the corporate credit spread rises more than Treasury bond rates decline as the Fed engages in quantitative easing and lowers the discount and Fed Funds rate. Also, assume that municipal bonds and corporate bonds trade less frequently so the liquidity premium rises quite significantly more than rates decline on Treasury bonds) on both municipal and corporate bonds. Which sector would you most prefer if you like to make the most money (or lose the least); O Municipal bonds Corporate bonds O Treasury bonds Step by Step Solution
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