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Basic Question 5 of 12
The credit spread widens during economic contractions due to ______.
B. increased chances of financial distress
C. reduced stock prices
A. lower interest rates
B. increased chances of financial distress
C. reduced stock prices
User Contributed Comments 1
| User | Comment |
|---|---|
| johntan1979 | A Interest rates are lower during economic contractions, but it does not explain the widening credit spread C There is no correlation between stock prices and the credit spread |
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Learning Outcome Statements
describe macroeconomic, market, and issuer-specific factors that influence the level and volatility of yield spreads
CFA® 2025 Level I Curriculum, Volume 4, Module 14.