The interest rate anticipation effect refers to
Effects of non-parallel yield curve shifts on immunized portfolios Scenario 1: The interest rate drops to 7.8%, soon after the bond is purchased, and stays there . Portfolio I, referred to as the 'bullet' portfolio consists of Bond C. the rate anticipation swap: if investors believe that interest rates will fall, they will switch into 5 Dec 2018 An inverted yield curve means the interest rate on long-term bonds is lower than Alternatively, markets could be anticipating very low inflation or even yield curve could adversely affect the financial conditions of banks…