- CFA Exams
- CFA Level I Exam
- Topic 6. Fixed Income
- Learning Module 26. The Term Structure and Interest Rate Dynamics
- Subject 3. The Swap Rate Curve and the Swap Spread
CFA Practice Question
Which spread measure is considered to be an indicator of the risk and liquidity in the money markets?
B. Z-spread
C. LIBOR-OIS spread
A. Swap spread
B. Z-spread
C. LIBOR-OIS spread
Correct Answer: C
It is considered to be a strong indicator for the relative stress in the money markets. It can be viewed as indication of banks' perception of the creditworthiness of other financial institutions and the general availability of funds for lending purposes.
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