CFA Practice Question

There are 266 practice questions for this study session.

CFA Practice Question

The yield spread of a corporate bond relative to a comparable, default-free bond is composed of ______.
A. risk-free interest rate + expected inflation rate + maturity premium + liquidity premium + credit spread
B. expected inflation rate + maturity premium + liquidity premium
C. liquidity premium + credit spread
Explanation: The liquidity premium and credit spread are there to compensate investors for these additional risks (liquidity risk and credit risk).

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