- CFA Exams
- CFA Level I Exam
- Topic 6. Fixed Income
- Learning Module 7. Yield and Yield Spread Measures for Fixed-Rate Bonds
- Subject 3. Yield Spread Measures for Fixed-Rate Bonds and Matrix Pricing
CFA Practice Question
The zero-volatility spread is a better measure than the G spread because ______
B. the G spread is only a one-point estimate whereas the z-spread considers the whole yield curve.
C. the Z spread adjusts for inflation while G spread does not, and the Z spread is a simpler measure to calculate.
A. the G spread is not an effective spread measure.
B. the G spread is only a one-point estimate whereas the z-spread considers the whole yield curve.
C. the Z spread adjusts for inflation while G spread does not, and the Z spread is a simpler measure to calculate.
Correct Answer: B
The Z spread is a better measure than the G spread because the G spread is only a one-point estimate whereas the Z spread considers the whole yield curve.
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