Question
Based on current economic conditions, you expect the yield curve (i.e. the 10y 3m spread on Treasuries) to flatten (i.e., 3m up, 10y down). Do
- Based on current economic conditions, you expect the yield curve (i.e. the 10y 3m spread on Treasuries) to flatten (i.e., 3m up, 10y down). Do you think that this would be a good or bad time to invest in 15-year mortgage fixed-rate agency pass-throughs? Why?
2. Based on your analysis of term structure movements in (1), you believe fixed mortgage rates are going to significantly drop in the future. Assuming you are correct, would you rather hold fully modified Agency pass-throughs currently priced at a premium to par, or at a discount? Why?
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Do Not Blame The Shorts Why Short Sellers Are Always Blamed For Market Crashes And How History Is Repeating Itself
Authors: Robert Sloan
1st Edition
0071636862,0071636870
