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Basic Question 6 of 12

The swap spread provides an indication of investors' required return for:

I. interest rate risk.
II. credit risk.
III. liquidity risk.
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User Contributed Comments 1

User Comment
CFAJ why liquidity 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

explain the swap rate curve and why and how market participants use it in valuation;

calculate and interpret the swap spread for a given maturity;

describe short-term interest rate spreads used to gauge economy-wide credit risk and liquidity risk;

CFA® 2025 Level II Curriculum, Volume 4, Module 26.