Bonds with Negative interest rates

[QuantMan2318]

Dear @David Harper CFA FRM

Recently there has been talk of Bonds with Negative yields, even being issued by some countries. They do not make any sense to me. Can you explain about them, their rationale and how their issue would complicate the calculation of Duration, the Derivatives on them, auction, CTD and so on?

Thanks

 

[Deepak Chitnis]

Hi @QuantMan2318, thank you for raising this question, it encourages me to read some additional blogs and sites. I found out this link:http://europe.pimco.com/EN/Insights...ve-and-What-Negative-Yields-Mean-for-You.aspx I think this explains me a lot of things. You should try reading this. Hope that helps.
Thank you