The Calendar or Time Spread Is Also Known as the Intramarket

question 25

True/False

The calendar or time spread is also known as the intramarket spread, and involves contracts for two different settlement months, such as buying a March contract and selling a June contract.

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Definitions:

Convexity

An indicator of how the bond price's sensitivity to interest rate changes varies with the bond's yield, reflecting adjustments in the bond's duration.

Basis Points

A unit of measure used in finance to describe the percentage change in the value or rate of a financial instrument.

Duration Mismatch

The disparity between the sensitivity of asset prices and liability values to changes in interest rates, affecting firms and financial institutions' balance sheets.

S&P 500

A market index representing 500 of the largest companies listed on American stock exchanges.