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Hi all I have a few general questions that i would like to consult you guys on: 1) What does it mean to hedge the bond duration? Why would we prefer a portfolio that has 0 net duration? 2) I undertand that in Banks, they usually hedge their Bonds with IRS. Am i right to say they do this in...

Hi all Was studying the Diebold chapters and am really struggling as it is quite heavy on the maths for me. Are the concepts in this chapters used for any chapters down the line? (Like in VAR/RIsk Model sections?)

Thanks @ShaktiRathore Was studying Diebold Chapter 5 and noticed Diebold mentioned that R^2 may lead to a model that doesn't provide an apt "out of sample" forecast? Would you know why this is the case?

Hi all I was reviewing the regressor (Stock and Watson Chapter 4-7) and have a query regarding Rsquare My original thoughts around R^2 is a measure of how well the indepedent variable(regressor) explains the dependent variable. Adjusted R^2 is used when we have multiple regressor as adding a...

Thanks all.

Hi all I have some pretty basic queries which I would appreciate some help on: 1) Looking at the first Stock & Watson example (Pg 84) , why did we use 1.972 instead of 1.96 as the z value? 2) Question 209.1 - how is the standard deviation obtained? The answer sheet stated that SD= SQRT(15%...

Hi all 1) Can you help me understand what is the factor portfolio used for? Based on the notes, since the factor portfolio only has a beta of 1 and beta = 0 for all other factors, it looks like the factor portfolios are being used as a tool to measure the impact of the common factors in the...

Interested to know this as well