The Motley Fool Discussion Boards

Previous Page

Investing/Strategies / Bonds & Fixed Income Investments

URL:  http://boards.fool.com/quotenvision-a-normal-yield-curve-its-shape-is-28215986.aspx

Subject:  Re: RE: CAGR Date:  1/8/2010  7:34 PM
Author:  trptrade Number:  29735 of 36468

"Envision a normal yield-curve. Its shape is polynomic, not linear. Why?"

You yourself have stated that bonds are puts, so shouldn't you expect their price - and thus their yield - to have the same time-value curve as an option (which is rather non-linear, and borders on something between an S-curve and logarithmic, just like the yield curve)?

Tom
Copyright 1996-2018 trademark and the "Fool" logo is a trademark of The Motley Fool, Inc. Contact Us