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Basic Question 12 of 13
Bond A and B have similar characteristics and credit quality. The OAS for A is 10bps and the OSA for B is 20 bps. Which bond is likely to be overpriced if other things are assumed to be equal?
B. Bond B
C. We cannot draw a conclusion based on OAS.
A. Bond A
B. Bond B
C. We cannot draw a conclusion based on OAS.
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I used your notes and passed ... highly recommended!
Lauren
Learning Outcome Statements
explain the calculation and use of option-adjusted spreads;
explain how interest rate volatility affects option-adjusted spreads;
CFA® 2025 Level II Curriculum, Volume 4, Module 28.