Monday, July 11, 2005
Gmail - The Demise of the Interest Rate: "When it comes to bond markets, the long-term (real) yield can be thought of being a geometric average of the expected future path of (real) short-term interest rates. For instance, a 10-year bond investment can be duplicated by ten successive 1-year investments. In an arbitrage free market, both investment strategies should yield the same outcome."
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