BOND SWITCH
Should You Switch?
Yield pickup means little until it repays the cost of moving.
Should You Switch?BondStats fixed-income workstation
POSITION INPUTS
THE SWITCH TEST
Break-even—
Yield pickup (bp)—
Cost recovery (months)—
INTERPRETATION
Switch test
Measure how long additional carry needs to recover switching cost and what happens to rate risk when the replacement enters the book. The purpose is decomposition: show which assumption creates the result and which risk remains outside the calculation.
Model boundary
This workstation isolates the stated drivers. Optionality, liquidity, tax, settlement and instrument-specific conventions can change realized economics and should be layered in separately.
CONTINUE THROUGH BONDSTATS
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