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Basic Question 1 of 5

A change in the assumed interest rate volatility can cause the change in the fair value of a corporate bond when:

I. there are coupons.
II. there are embedded options.
III. there is credit risk.

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Craig Baugh

Craig Baugh

Learning Outcome Statements

calculate the value of a bond and its credit spread, given assumptions about the credit risk parameters;

CFA® 2025 Level II Curriculum, Volume 4, Module 29.