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Basic Question 4 of 5
The reason why there is a volatility impact on the fair value of an option-free corporate bond is because:
B. the implied forward rates are asymmetrical.
C. liquidity and tax differences are not built in the model.
A. interest rates are spread out around the implied forward rate for each date.
B. the implied forward rates are asymmetrical.
C. liquidity and tax differences are not built in the model.
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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.