CFA Practice Question

There are 252 practice questions for this study session.

CFA Practice Question

Bond A and B have similar characteristics and credit quality. The OAS for A is 10bps and the OSA for B is 20 bps. Which bond is likely to be overpriced if other things are assumed to be equal?

A. Bond A
B. Bond B
C. We cannot draw a conclusion based on OAS.
Correct Answer: A

OAS is often used as a measure of value relative to the benchmark. A lower OAS indicates the bond is likely overpriced.

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