Please refer to p93 of Volume 2 in the curriculum, or to p109 of Book 2 in SchweserNotes.
When describing credit risk free bonds, the material states that:
Usually an increase in short-term rates increases the yields on medium- and long-term
bonds. Medium- and long-term bond yields may actually fall, though, if the interest rate
increase is gauged sufficient to slow the economy.
Can someone please explain this |