- CFA Exams
- CFA Level I Exam
- Topic 6. Fixed Income
- Learning Module 27. The Arbitrage-Free Valuation Framework
- Subject 2. The Basics of Creating a Binomial Interest Rate Tree
CFA Practice Question
When the yield curve is flat, which statement is true regarding a benchmark bond?
B. The par curve and spot curve are identical. Its forward rate curve will lie below them.
C. The par curve, spot curve and forward curve are identical.
A. The par curve and spot curve are identical. Its forward rate curve will lie above them.
B. The par curve and spot curve are identical. Its forward rate curve will lie below them.
C. The par curve, spot curve and forward curve are identical.
Correct Answer: C
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