Last line of the Page no 82 says Putables outperform for the investor with a decidely bearish outlook for interest rate which is very contradicting…because they say put structures outperform when interest rat incease.
Please some one can tell me whats the meaning of it?
For fixed income securities, “bearish” means interest rate increase because values of fixed income securities decrease which is unfavorable to investors.
agree with aloha. when it comes to fixed income securities, the focus is on the credit’s price, not the interest rate. the gain or loss, by extension, is on the bond’s price.