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Coupon bonds and Arbitrage

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  • This topic has 2 replies, 3 voices, and was last updated Dec-17 by farlo001.
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    • arun80n
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      Forum Level 1 Summer Associate
      05 Dec 2017 at 11:56 pm
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      If two coupon bonds with the same maturity have different coupon rates and yields to maturity, is there a possibility to exploit an arbitrage?

    • Sophie Macon
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      Forum Level 9 SVP
      06 Dec 2017 at 6:14 pm
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      If they are completely identical (i.e. same issuer, maturity etc) except with prices, yes!

    • farlo001
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      Forum Level 1 Summer Associate
      07 Dec 2017 at 6:58 pm
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      How exactly would you arb it?  Bonds are not an easy thing to short.

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