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Basic Question 19 of 20
The credit spread widens during economic contractions, due to ______.
B. increased chances of financial distress
C. reduced stock prices
A. lower interest rates
B. increased chances of financial distress
C. reduced stock prices
User Contributed Comments 1
| User | Comment |
|---|---|
| johntan1979 | A Interest rates are lower during economic contractions, but it does not explain the widening credit spread C There is no correlation between stock prices and the credit spread |
Thanks again for your wonderful site ... it definitely made the difference.
Craig Baugh
Learning Outcome Statements
describe credit risk and its components, probability of default and loss given default
CFA® 2025 Level I Curriculum, Volume 4, Module 14.