CFA Practice Question

There are 147 practice questions for this study session.

CFA Practice Question

The arbitrage free valuation approach uses the ______ on a ______ to discount each cash flow of a bond.
A. weighted discount rate; bond of equal maturity
B. individual discount rates; premium bond
C. spot rates; zero coupon bond of equal maturity
Explanation: The arbitrage free valuation approach uses the spot rates on a zero coupon bond of equal maturity to discount each cash flow of a bond.

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