Trading Negative Yielding Debt

The video tutorial explores creative ways to generate income through financial strategies. It covers FX hedging, where rising demand for the dollar allows investors to earn returns in Europe and Japan. The tutorial also discusses the concept of a steeper yield curve, which enables borrowing in the short term and investing in longer-term maturities, particularly in Japan. The flattening of the US yield curve is also mentioned as a factor that might drive funds to seek steeper alternatives.

What is one way investors can generate positive returns in Europe using US dollars?

• Using FX hedging strategies

• Investing in European stocks

• Investing in cryptocurrency

• Buying real estate in Europe

What is the approximate annual yield from a three-month currency forward in Japan?

• 4.2%

• 3.0%

• 2.6%

• 1.5%

How much more can investors earn with Italian debt compared to other European investments?

• 5%

• 4%

• 3%

• 2%

What is the difference between the six-month Libor rate and the 20-year yen swap rate in Japan?

• 16 basis points

• 20 basis points

• 11 basis points

• 25 basis points

What might the flattening of the US yield curve lead investors to do?

• Increase savings in US banks

• Buy more US real estate

• Seek steeper yield curves elsewhere

• Invest more in US stocks