Why should I choose AnalystNotes?
Simply put: AnalystNotes offers the best value and the best product available to help you pass your exams.
Basic Question 5 of 19
The arbitrage-free valuation approach is different from traditional valuation because ______
II. the bond is broken into zero-coupon bonds and discounted by multiple spot rates.
III. spot rates are estimated for each cash flow maturity.
I. the bond is broken into zero-coupon bonds and a single bond rate is used.
II. the bond is broken into zero-coupon bonds and discounted by multiple spot rates.
III. spot rates are estimated for each cash flow maturity.
User Contributed Comments 3
| User | Comment |
|---|---|
| Luminos | These basic questions are great to determine whether one understands a conept. The multiple answers did unnerve me at first but will be beneficial. |
| Qoqi | Quick way to review the theory too |
| ldfrench | ^^Agree with Luminos |
Thanks again for your wonderful site ... it definitely made the difference.
Craig Baugh
Learning Outcome Statements
identify the relationships among a bond's price, coupon rate, maturity, and yield-to-maturity
CFA® 2024 Level I Curriculum, Volume 4, Module 6.