Hi everybody
Since I am new here I would like to introduce me. I am Maria, from Spain, and work as an analyst in an investment bank.
I have a question concerning inflation linked bonds. Since it is possible to create synthetic long positions in an inflation linked bond out of a long position in a nominal bond and a (receiver-)position in an inflation swap, I am wondering, how this is executed in practice.
Say, I have a nominal coupon bearing bond. Do I now enter into several zero-inflation swaps (one swap for each payment date of the nominal bond ( coupon and redemption))?
Or do I only enter in one year-on-year swap?
What is the nominal of the swap(s)?
Can somebody recommend me some literature on that topic?
Kind regards and many thanks
Maria
Since I am new here I would like to introduce me. I am Maria, from Spain, and work as an analyst in an investment bank.
I have a question concerning inflation linked bonds. Since it is possible to create synthetic long positions in an inflation linked bond out of a long position in a nominal bond and a (receiver-)position in an inflation swap, I am wondering, how this is executed in practice.
Say, I have a nominal coupon bearing bond. Do I now enter into several zero-inflation swaps (one swap for each payment date of the nominal bond ( coupon and redemption))?
Or do I only enter in one year-on-year swap?
What is the nominal of the swap(s)?
Can somebody recommend me some literature on that topic?
Kind regards and many thanks
Maria
