Reading 13. Example 4.
With an inverted yield curve, a manager faces negative carry when financing a bond purchase in the
repo market.
Can someone please explain this to me?
Reading 13. Example 4.
With an inverted yield curve, a manager faces negative carry when financing a bond purchase in the
repo market.
Can someone please explain this to me?
The overnight borrowing rate is 2% and the yield on the one-year bond you buy is 1%.
Ha. So simple when you put it that way.