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Basic Question 4 of 14
What is the G spread between a 20-year, 9% corporate AA bond that is priced at $87.56, and a 20-year, 8% Treasury bond priced at $97.57?
B. 100 basis points
C. 225 basis points
A. 11 basis points
B. 100 basis points
C. 225 basis points
User Contributed Comments 5
| User | Comment |
|---|---|
| gill15 | I cant believe after all the bond questions we did i chose a 100 basis points... |
| ldfrench | Gotta remember to take it from semiannual to annual by multiplying it by 2. Always a common mistake |
| Fabulous1 | As the difference between the basis point options is this big you can just use the annual values and still get around 225 bp |
| brunoma94 | Its not the difference between coupon rate but the difference between YTM |
| thevinu | Annually compounded difference gets you around 226.1 but its close enough. For precise answer it's better to go with the default semi annual calculations. |
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
Learning Outcome Statements
compare, calculate, and interpret yield and yield spread measures for fixed-rate bonds
CFA® 2025 Level I Curriculum, Volume 4, Module 7.