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Basic Question 4 of 12
In general, the credit spread ______.
B. widens during economic contractions
C. remains stable over time
A. widens during economic expansions
B. widens during economic contractions
C. remains stable over time
User Contributed Comments 5
| User | Comment |
|---|---|
| nija | Credit spread is inversely propotional to expansion/contraction |
| mrushdi | During economic contraction companies have to offer a high margin to retain bond holers, otherwise being moved to treasury stock. |
| johntan1979 | Flight to quality |
| praj24 | Wiz Khalifa - flight school |
| Antoinepo | Wiz- Rooftop |
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Learning Outcome Statements
describe macroeconomic, market, and issuer-specific factors that influence the level and volatility of yield spreads
CFA® 2024 Level I Curriculum, Volume 4, Module 14.