- CFA Exams
- CFA Level I Exam
- Topic 6. Fixed Income
- Learning Module 5. Fixed-Income Markets for Government Issuers
- Subject 3. Non-Sovereign Bonds, Quasi-Government Bonds, and Supranational Bonds
CFA Practice Question
Non-sovereign bonds usually trade at a higher yield than sovereign bonds with similar characteristics because non-sovereign bonds have higher ______.
II. interest rate risk
III. liquidity risk
I. credit risk
II. interest rate risk
III. liquidity risk
Correct Answer: I and III
User Contributed Comments 2
| User | Comment |
|---|---|
| maryprz14 | higher credit risk? then in the notes, non-sovereign bond receives higher credit rating due to low default rate... often higher yield than sovereign bonds. I'm so confused. |
| khalifa92 | true non-sovereign has low default risk but in comparison to sovereign you cant just give the same yield thus it's more (small percentage) due to credit risk and liquidity. |