David,

I enjoyed your article, but was wondering the impact that time has on your exercise. It is my understanding if rates move up by 100 bps in 1 year then the total return of the bond would be less than if the same bond moved up by 100 bps in 3 years. The reason is the interest that is accrued or paid is greater for 3 year period than 1 year period. In other words, the interest would offsets some capital loss. Thanks for your time.

William Kanto, CFA