- CFA Exams
- CFA Level I Exam
- Study Session 12. Fixed Income (1)
- Reading 33. The Arbitrage-Free Valuation Framework
- Subject 2. Interest Rate Trees and Arbitrage-Free Valuation
CFA Practice Question
From par rates we can generate spot rates and implied forward rates. If we discount each cash flow with the appropriate discount rate for each period, which rates will produce the highest value?
B. spot rates
C. implied forward rates
A. par rates
B. spot rates
C. implied forward rates
Correct Answer: None of them
The computed values will be the same.
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