- CFA Exams
- CFA Exam: Level II 2021
- Study Session 13. Fixed Income (2)
- Reading 35. Credit Analysis Models
- Subject 3. Structural and reduced form credit models
CFA Practice Question
Reduced-form models assume that given the state of the economy, a company's default probability depends on:
B. the time T value of the company's assets.
C. company-specific risk.
A. its liability structure.
B. the time T value of the company's assets.
C. company-specific risk.
Correct Answer: C
It depends only on company-specific or idiosyncratic risk.
User Contributed Comments 0
You need to log in first to add your comment.