Question
Agency 30-year fixed-rate MBS usually shows negative convexity behavior as shown in the following price profile chart, while the 10-Treausry bond shows positive convexity. Can
Agency 30-year fixed-rate MBS usually shows negative convexity behavior as shown in the following price profile chart, while the 10-Treausry bond shows positive convexity.
Can you use your own language to differentiate negative convexity MBS with positive convexity 10-year Treasury bond?
Which one has higher risk: the MBS or the 10-year Treasury bond? Which one should have higher yield?
What is the real challenge for the negative convexity MBS investor, in your mind?
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The Little Book Of Market Myths: How To Profit By Avoiding The Investing Mistakes Everyone Else Makes
Authors: Kenneth L. Fisher
1st Edition
1118445015, 978-1118445013
