Professional investors who mark to market need to know how their portfolios would perform under various interest-rate scenarios. Such "stress testing" is available in standard analytics systems, but when it comes to munis, the results could be seriously misleading.
Suppose that you just purchased at par a 3% 10-year muni. What happens to the price if rates suddenly decline or rise by 100 basis points? Published March 15th, 2013 in the Bond Buyer