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Basic Question 1 of 12

The higher the credit risk of a bond, ______.

I. the higher the required yield
II. the greater the volatility of its returns
III. the higher the liquidity risk

User Contributed Comments 2

User Comment
warnggg Why not C?
ahmed999 @WARNGGG because the liquidity risk is entirely different and not related by anyway to credit risk.
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I just wanted to share the good news that I passed CFA Level I!!! Thank you for your help - I think the online question bank helped cut the clutter and made a positive difference.
Edward Liu

Edward Liu

Learning Outcome Statements

describe macroeconomic, market, and issuer-specific factors that influence the level and volatility of yield spreads

CFA® 2026 Level I Curriculum, Volume 4, Module 14.