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PREFERRED STOCK ARBITRAGE OF MUNICIPAL BOND MARKET SEGMENTATION
Author(s) -
Elmer Peter J.
Publication year - 1986
Publication title -
financial review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.621
H-Index - 47
eISSN - 1540-6288
pISSN - 0732-8516
DOI - 10.1111/j.1540-6288.1986.tb01132.x
Subject(s) - arbitrage , municipal bond , stock (firearms) , business , bond , stock market , financial economics , profit (economics) , market segmentation , economics , monetary economics , finance , microeconomics , engineering , mechanical engineering , paleontology , horse , biology
This paper discusses how tax and regulatory constraints in the municipal bond market can affect preferred stock yields and give rise to arbitrage opportunities in the preferred stock market. The potential for profit is illustrated with an example that also serves to highlight the unique characteristics of recently developed forms of preferred stock.