- CFA Exams
- CFA Level I Exam
- Study Session 14. Fixed Income (1)
- Reading 44. Introduction to Fixed-Income Valuation
- Subject 7. The Maturity Structure of Interest Rates
CFA Practice Question
For the purpose of deriving the yield curve, the yields on maturities with no on-the-run Treasuries are estimated ______.
A. from off-the-run Treasuries
B. through interpolation
C. from AAA rated corporate bonds
User Contributed Comments 3
| User | Comment |
|---|---|
| danlan | Interpolation is used for the estimation. |
| iceluke | the benchmark for tax-exempt securities are generic AAA obligation yield curves |
| xjarl | Off-the-run issues are priced differently due to liquidity premium, and municipals and corporate bonds carry slight credit risk, so interpolation is best. |