CFA Practice Question

There are 490 practice questions for this study session.

CFA Practice Question

The arbitrage-free valuation approach is different from traditional valuation because ______

I. the bond is broken into zero-coupon bonds and a single bond rate is used.
II. the bond is broken into zero-coupon bonds and discounted by multiple spot rates.
III. spot rates are estimated for each cash flow maturity.
Correct Answer: II and III

User Contributed Comments 3

User Comment
Luminos These basic questions are great to determine whether one understands a conept. The multiple answers did unnerve me at first but will be beneficial.
Qoqi Quick way to review the theory too
ldfrench ^^Agree with Luminos
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