EBK INVESTMENTS
EBK INVESTMENTS
11th Edition
ISBN: 9781259357480
Author: Bodie
Publisher: MCGRAW HILL BOOK COMPANY
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Chapter 21, Problem 3PS
Summary Introduction

To think critically about:

The relationship between income yield and interest rate is to be explained. The impact of interest rate and income yield over the time-spread is to be determined.

Introduction:

Time spread is the hedging technique. It involves simultaneously buying and selling the contract of same underlying stock at similar price with different maturity period. It means investor is purchasing a contract of long- maturity and selling the contract of short- maturity.

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