CFA Practice Question

There are 252 practice questions for this study session.

CFA Practice Question

The zero-volatility spread is a better measure than the nominal yield because:

A. the nominal yield is not an effective yield measure.
B. the nominal yield is only a one-point estimate whereas the Z-spread considers the whole yield curve.
C. the Z-spreads adjust for inflation while nominal spreads do not.
Correct Answer: B

The zero-volatility spread is a better measure than the nominal yield because the nominal yield is only a one-point estimate whereas the Z-spread considers the whole yield curve.

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