Hi @David Harper CFA FRM. The hedging bit was in reply to @lushukai 's answer here.
If you are asking about the original question, that was purely theoretical. Not from any particular source.
Hi Thanks! Could you go into detail into the hedging part? A lot of books I read don't include strategies on bond hedging so I am interested on how bond hedging strategies work.
Suppose I am presented 2 bonds
YTM
Coupon
A
5%
6%
B
5%
4%
Given that both bonds have the same YTM, tenor, credit risk would either bond be better than another?
A couple of things come to mind. In particular that the Macaulay duration (how fast an investor gets their money back) of...
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