A tax arbitrage that creates a system of building up collection of tax-free or tax-exempt municipal bonds whilst protecting oneself against the risk involved with municipal bond collections, such as the duration. It is done by shortening the duration of corresponding taxable corporate bonds with the sole purpose of benefiting from this system of cheap municipal bonds that have longer duration or maturity (when the bonds have to be redeemed).
Related information about municipal bond arbitrage:
- Municipal bond arbitrage - Wikipedia, the free encyclopedia
Municipal bond arbitrage, also called municipal bond relative value arbitrage, municipal arbitrage, or just muni arb, generally consists of building a leveraged ...
- Municipal Bond Arbitrage Definition | Investopedia
A strategy that consists of building a portfolio of tax-exempt municipal bonds and simultaneously hedging the duration risk of the portfolio through the short sale ...
- Leveraged Municipal Bond Arbitrage: What Went Wrong?1
investment strategy known as leveraged municipal bond arbitrage. Municipal bond arbitrage is a complicated, risky strategy involving trades of municipal bonds ...
- Research Primer: The Risks and Rewards of Municipal Bond Arbitrage
May 9, 2011 ... A recent paper from NERA Economic Consulting explains the risk components of municipal bond arbitrage and concludes that the strategy is ...
- Leveraged Municipal Bond Arbitrage: What Went Wrong?: The ...
Substantial losses suffered by several multibillion dollar fixedincome hedge funds have brought attention to risks involved in what was advertised as a leveraged ...
- What is municipal bond arbitrage? definition and meaning
Definition of municipal bond arbitrage: A tax arbitrage that creates a system of building up collection of tax-free or tax-exempt municipal bonds whilst protecting ...
- Municipal Bond Arbitrage | ArbitragePortfolio.com - YouTube
May 14, 2012 ... Free Application Download: http://www.arbitrageportfolio.com/Municipal-Bonds- Arbitrage-Calculator.xlsx Full Article: ...
- Municipal Bond Arbitrage Funds | Klayman & Toskes
Feb 22, 2011 ... The municipal bond arbitrage strategy employed by these funds was risky and exposed investors to losing their principal investment.