CFA Practice Question

CFA Practice Question

Which of the following is most likely incorrect?
A. The Z-spread takes into account the term structure of interest rates, but ignores the impact of embedded options.
B. The Z-spread is same as the nominal spread if the yield curve is perfectly flat.
C. The difference between the Z-spread and the nominal spread is larger for issues with bullet repayment.
Explanation: The difference between the Z-spread and the nominal spread is larger when the repayment is spread out over time.

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