Will Generative AI Like ChatGPT Replace Your Job?
Money For the Rest of Us
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Chat GPT's Knowledge of Bonds
Chat GPT doesn't know anything. From a knowledge standpoint, it just knows how to string words together but the words it's strung together was that non-investment of great bonds are less sensitive to interest rate fluctuations because they have higher cash flows. A 30-year treasury bond with a 4% coupon has a 17.8 year duration whereas a 1% coupon or interest rate as a 26-year duration. That's an element of what is known as convexity that as interest rates fall, bonds become more sensitive to interest rates.
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