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Basic Question 2 of 2

Which statement is true?

I. High-yield bonds have a higher proportion of YTM attributed to a credit spread, while investment-grade bonds have a lower proportion of YTM attributed to a credit spread.

II. The only difference between investment-grade and high-yield corporate bonds is simply the difference in credit spreads to compensate investors for assuming more or less default risk.

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I am happy to say that I passed! Your study notes certainly helped prepare me for what was the most difficult exam I had ever taken.
Andrea Schildbach

Andrea Schildbach

Learning Outcome Statements

contrast the long-term funding of investment-grade versus high-yield corporate issuers

CFA® 2025 Level I Curriculum, Volume 4, Module 4.