Scan QR code or get instant email to install app
Question:
Consider the following statements:
Statement 1: Given the term to maturity, a corporate bond cannot possibly offer a lower yield than a U.S. Treasury.
Statement 2: U.S. Treasures are free of credit risk, but not risk‐free.
Which of the following is most likely?
A
Only Statement 2 is correct.
explanation
• Given the term to maturity, a putable corporate bond may actually offer a lower yield than a U.S. Treasury.
• Statement 2 is correct, as U.S. Treasures have an element of reinvestment risk among other risks.
Take more free practice tests for other PASSEMALL topics with our cfa sample questions now!
Related Information
Comments