1. You are in the market for a new car. With car sales slumping, one of the manufacturers offers a long-term extended warranty at no extra charge. Do you:
a) Grab the deal?
b) Buy, but decline the warranty on the grounds that you believe the manufacturer will lose money by throwing it in for free?
My guess is that the majority of high yield bond managers will take only a fraction of a nanosecond to reject option ‘b’. Strangely, though, many of
The week on Risk.net, July 7-13, 2018Receive this by email