- CFA Exams
- CFA Exam: Level II 2021
- Study Session 13. Fixed Income (2)
- Reading 35. Credit Analysis Models
- Subject 6. The term structure of credit spreads
CFA Practice Question
There is a ______ relationship between credit spreads and benchmark rates.
B. counter-cyclical
C. linear
A. cyclical
B. counter-cyclical
C. linear
Correct Answer: B
When the economy is strong we tend to have high benchmark rates and low credit spreads.
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