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Basic Question 9 of 9
A debt issuer may be upgraded or downgraded next year, and its credit spread may become smaller or bigger, affecting the value of the bond. "Typically", credit spread migration is likely to ______ the expected value on the bond.
B. not change
C. increase
A. reduce
B. not change
C. increase
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I used your notes and passed ... highly recommended!
Lauren
Learning Outcome Statements
explain credit scores and credit ratings;
calculate the expected return on a bond given transition in its credit rating;
CFA® 2025 Level II Curriculum, Volume 4, Module 29.