DRAFT

Finance Seminar

Thursday, March 31, 2022
4:00pm to 5:00pm
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Baxter B125
Treasury Richness
Francis Longstaff, Distinguished Professor of Finance and Allstate Chair in Insurance, Anderson School of Management, UCLA,

Abstract: It is widely believed that Treasuries trade at premium prices because of their safety and money-like properties. In reality, this is only true on a relative basis when compared to other bonds, but is often not true on an absolute basis. Many Treasuries have repeatedly traded at substantial discounts to their intrinsic fair values for extended periods during the past 25 years. Since 2015, Treasuries have consistently been priced at an aggregate discount of $100 to $300 billion below their fair values. Treasuries often actually become cheaper following crises. These results provide new perspectives on safe-asset theories.

For more information, please contact Sabrina Hameister by phone at 626-395-4228 or by email at sabrina@hss.caltech.edu.