stockjaguar

yellayella wrote:
hi i read somewhere that if a manager expects spreads to narrow for all spread product sectors , she should underweigh treasuries and overweight allocations to spread products such as mortgage, asset-backed and CMBS sectors.
do credit sectors not belong to spread products?
thanks!
that answer included an extra 75 bps rising of IR in the long-term part of the yield curve and a 25 bps rise in the short-term part of the curve.
that’s why they said that treasuries (LT) should be underweighted as they were expected to decrease with IR increase.
MOCK 2010 Item set Q36