- 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
The swap rate curve:
II. is a default-free curve.
III. always trades through (above) the corresponding bond curve.
I. plots maturity (or length) of the swap against the fixed rate you will have to pay/receive if you enter into the swap.
II. is a default-free curve.
III. always trades through (above) the corresponding bond curve.
Correct Answer: I and III
It is not a default-free curve. Instead it is an inter-bank or AA rated curve.
User Contributed Comments 1
| User | Comment |
|---|---|
| Querdenker | Well, most banks are down at Single A these days... |