• 2022-05-27
    Su’sdefinitionofcreditspreadriskis:
    A: correct.
    B: incorrect,becausecreditspreadriskistheriskthatabond’spricewillfallwhenthebond’sriskpremiumincreaseswhiletheyieldonasimilarmaturityTreasurybondfalls.
    C: incorrect,becauseCreditspreadriskistheriskthatabond’spricewillfallwhenthebond’sriskpremiumdecreaseswhiletheyieldonasimilarmaturityTreasurybondrises.
    D: incorrect,becausecreditspreadriskistheriskthatabond’spricewillfallwhenthebond’sriskpremiumremainsconstantwhiletheyieldonasimilarmaturityTreasurybondrises.