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- Title
Diversification Gains in the Market for Provincial Bonds.
- Authors
Galvani, Valentina; Behnamian, Aslan
- Abstract
What are the potential benefits of investing in bonds issued by a province for an investor who already holds an efficient portfolio of bonds issued by the remaining nine provinces? Furthermore, how beneficial is the exposure to additional provincial bond markets from the perspective of investors whose core interests reside in maximizing the return to risk bearing? This paper addresses these and similar questions by evaluating the gains from portfolio diversification in the Canadian market for provincial bonds. Our findings indicate that market participants are unlikely to benefit from portfolio diversification. In particular, once realistic trading restrictions are taken into account, the benefits from the exposure to multiple provincial bond markets might be exhausted by investing in the bonds issued by one province alone.
- Subjects
CANADA; BONDS (Finance); INVESTORS; PORTFOLIO management (Investments); DIVERSIFICATION in industry; MONEY market; BOND market
- Publication
Quarterly Journal of Finance & Accounting, 2008, Vol 47, Issue 4, p125
- ISSN
1939-8123
- Publication type
Article