R28 Immunization Target Rate pg 29 higher, return, therefore, 2011

pimpineasy

can anyone tell me why when we have an upward sloping yield curve, we have an immunization rate that is less than the YTM becuase of "lower" reinvestment return, and vice versa if we have a downward curve. If the slope is upward sloping, isn't the expectation higher yields therefore higher reinvestment return? Help would be appreciate. Thanks.



Edited 2 time(s). Last edit at Sunday, February 27, 2011 at 02:04AM by darlia.