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Basic Question 4 of 14
What is the G spread between a 20-year, 9% corporate AA bond that is priced at $87.56, and a 20-year, 8% Treasury bond priced at $97.57?
B. 100 basis points
C. 225 basis points
A. 11 basis points
B. 100 basis points
C. 225 basis points
User Contributed Comments 5
| User | Comment |
|---|---|
| gill15 | I cant believe after all the bond questions we did i chose a 100 basis points... |
| ldfrench | Gotta remember to take it from semiannual to annual by multiplying it by 2. Always a common mistake |
| Fabulous1 | As the difference between the basis point options is this big you can just use the annual values and still get around 225 bp |
| brunoma94 | Its not the difference between coupon rate but the difference between YTM |
| thevinu | Annually compounded difference gets you around 226.1 but its close enough. For precise answer it's better to go with the default semi annual calculations. |
I am using your study notes and I know of at least 5 other friends of mine who used it and passed the exam last Dec. Keep up your great work!
Barnes
Learning Outcome Statements
compare, calculate, and interpret yield and yield spread measures for fixed-rate bonds
CFA® 2025 Level I Curriculum, Volume 4, Module 7.