The phrase 'yield pick- up' refers to:
A) a capital gain that the holder of a swap enjoys when the RBA decreases interest rates.
B) a gain that comes by switching from interest bearing to dividend bearing derivatives.
C) an arbitrage profit that a trader picks up by buying and selling two swap contracts simultaneously.
D) an increased floating rate yield obtained by investing in a high- yield bond and swapping into a floating- rate investment.

Question

Quizplus · Accepted Answer

Yield pick-up refers to the increased yield obtained by investing in a higher-yielding bond and then swapping it into a floating-rate investment, typically to benefit from the higher interest rates.

The Phrase 'Yield Pick- Up' Refers To