- CFA Exams
- CFA Exam: Level II 2021
- Study Session 13. Fixed Income (2)
- Reading 35. Credit Analysis Models
- Subject 3. Structural and reduced form credit models
CFA Practice Question
Structural models aim to explain:
B. when default occurs.
C. how likely default occurs.
A. why default occurs.
B. when default occurs.
C. how likely default occurs.
Correct Answer: A
The models states that when the asset value falls below the amount of liabilities, default will occur.
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