Explaining and Forecasting Bond Risk Premiums

Posted: 11 Aug 2010

Date Written: August 11, 2010

Abstract

In examining the risk premiums for U.S. and German 10-year government bond yields, the authors found that the decline in bond risk premiums since the 1980s is associated with a decrease in global output variability and an increase in the power of 10-year government bonds to diversify portfolios.

Keywords: Portfolio Management, Asset Allocation, Portfolio Theory Foundations, Fixed Income, Term Structure Determination and Yield Spreads, Theories of the Term Structure of Interest Rates

Suggested Citation

Palazzo, Gerardo and Nobili, Stefano, Explaining and Forecasting Bond Risk Premiums (August 11, 2010). Financial Analysts Journal, Vol. 66, No. 4, pp. 67-82, 2010, Available at SSRN: https://ssrn.com/abstract=1656953

Gerardo Palazzo (Contact Author)

Bank of Italy ( email )

Via Nazionale 91
Rome, 00184
Italy

Stefano Nobili

Bank of Italy ( email )

Via Nazionale 91
Rome, 00184
Italy

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