CFA Practice Question

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CFA Practice Question

In general, the credit spread ______.

A. widens during economic expansions
B. widens during economic contractions
C. remains stable over time
Correct Answer: B

User Contributed Comments 5

User Comment
nija Credit spread is inversely propotional to expansion/contraction
mrushdi During economic contraction companies have to offer a high margin to retain bond holers, otherwise being moved to treasury stock.
johntan1979 Flight to quality
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Antoinepo Wiz- Rooftop
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