Workout Period
The period of time in which temporary yield discrepancies between fixed income securities are adjusted. Investopedia Says:
Investors typically take advantage of this period by participating in a bond or sector swap. For example, if an investor believes that the yield spread between two bonds is too wide, their investment would be moved from the higher yielding bond to the lower yielding bond. If the investor has guessed the expected workout period correctly, the investor will gain from the yield adjustment. Related Terms:
Arbitrage
Bond
Bond Swap
Fixed-Income Security
Yield |