- CFA Exams
- CFA Level I Exam
- Study Session 13. Fixed Income (2)
- Reading 35. Credit Analysis Models
- Subject 5. Interpreting changes in a credit spread
CFA Practice Question
Changes in credit spread can be caused by changes in:
II. default probability
III. liquidity
I. recovery rate
II. default probability
III. liquidity
A. I and II
B. I, II and III
C. II only
Explanation: Expected loss from default (I and II), liquidity, and taxation can all cause the credit spread to change.
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