To increase duration increase, somebody

Carson

Pay floating ....Can somebody explain the rationale?
Gracias

Zestt

also---

buying futures increases duration and selling futures decreases duration. why?

Iginla2011

because you are receiving a fixed rate of return. FLoating rate bonds will have a lower duration, because the coupon resets to market rates (hence less sensitive to interest rate shifts)

fixed coupon bonds will be more sensitive to interest rate changes (because their coupons dont reset to market rates).

So to increase duration, buy fixed coupon bonds - OR enter into a swap where i receive a fixed cash flow (and therefore would be paying floating)

skycfa

Issued floating rate debt to invest in fixed rate debt.