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liquidity premium
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What does the interest rate sensitivity of longer term bonds have to do with liquidity preference?
In the section of chapter 14 that attempts to explain theories for the term structure of interest rates, one theory given is that of liquidity preference. Contrary to the title, this does not mention the fact that people will typically prefer investments that can be liquidated more quickly... -
C
Why are longer term bonds less illiquid?
I read that bonds that are held until maturity are not exposed to illiquidity risk. 1. I didn't understand why is this was so? I interpret this to mean that long term bonds are more liquid (less illiquid) than short term bonds? Is that correct or I have I misinterpreted this? I actually...- curiousactuary
- Thread
- bonds illiquidity premium liquidity premium
- Replies: 3
- Forum: SA2
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M
April 2017 Q1(i)
Hi Lindsay I'm trying to understand the reason why widening spreads is listed as a risk in the examiner's report. Isn't it only a risk if the company doesn't intend to hold the bonds to maturity? I would assume that the company does intend to do so if it's assets and liabilities are...- Mbotha
- Thread
- bel bonds credit risk premium credit spread liquidity premium reinsurance scr spread
- Replies: 8
- Forum: SA2