- CFA Exams
- CFA Level I Exam
- Topic 6. Fixed Income
- Learning Module 29. Credit Analysis Models
- Subject 3. Structural and Reduced Form Credit Models
CFA Practice Question
The assumption used in the structural model include that the company's assets trade in frictionless markets that are arbitrage free. This implies:
II. no transaction costs.
III. the company's asset value is observable at all times.
I. markets are liquid.
II. no transaction costs.
III. the company's asset value is observable at all times.
Correct Answer: I, II and III
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