PT  - JOURNAL ARTICLE
AU  - David F. Babbel
AU  - Cindy W. Ma
AU  - Bing J. Ni
TI  - The Usefulness of Inverse Floaters
AID  - 10.3905/jpm.2000.319740
DP  - 2000 Jan 31
TA  - The Journal of Portfolio Management
PG  - 71--80
VI  - 26
IP  - 2
4099  - https://pm-research.com/content/26/2/71.short
4100  - https://pm-research.com/content/26/2/71.full
AB  - Inverse floaters are sometimes characterized by the popular financial press in unfavorable terms, particularly with respect to their reported role in a number of municipal financial crises during the mid–1990s. In this article, the authors show how inverse floaters can be used in conjunction with government bonds and repo leverage to create attractive risk–return profiles and stable income over a wide variety of economic scenario. Inverse floaters can be particularly attractive during periods of steep yield curves.