Three questions:1. I understand that there are a few different measures of bond spread - Z-Spread, asset swap spread, implied CDS spread, etc. If I'm looking at the historical basis between a bond price and it's maturity-matched spread, what's the correct measure to consider? Also, does the quality of the measure change depending if the bond is significantly above or below par?2. How do bond positions work? Assuming that I have a 10MM position in a bond that trades at 80, does that actually mean that I hold 8MM (will get 10MM when bond redeems) or that I acutally hold 10MM (and will receive 10/8 x 10mm when the bond redeems)?3. How does one short a bond?Thank you in advance.

1. Before you spend any time looking at CDS you might want to read the recent research on this topic by Kamakura. They have, at least to my mind, convincingly demonstrated that the CDS market is illiquid and uncompetitive and hence that any inferences drawn from CDS prices should be viewed with considerable suspicion. For the record, I have no interest in that company.2. You hold a 10MM bond position worth 8MM. At maturity you will receive 10MM if the issuer does not dafault.3. Essentially, you borrow it from someone who already owns it. You do this by executing a transaction called a reverse repo whereby you temporarily buy the bond and simultaneously agree to sell it back later. You then take the bond you just acquired in the repo market and sell it in the cash market. If your bearish view proves correct or you are lucky and the bond price subsequently falls you can then buy it back in the cash market and fulfill your obligation to complete the reverse repo transaction. If the bond prices rises, well, you obviously then lose money when you close out the repo transaction.

As the borrowing party of the repo, do you usually pay or receive haircut for corp bonds?