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17) You are a credit analyst and your boss asks you to look at two corporate bonds that are callable at par and have the

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17) You are a credit analyst and your boss asks you to look at two corporate bonds that are callable at par and have the same characteristics in terms of maturity, credit quality, and call dates. You use the option adjusted spread (OAS) approach to analyze the bonds. Based on this approach you come up with the following results: Bond OAS (in bps) 25.5 30.3 Based on OAS, which one of the following is true? a) Bond A is overpriced compared to Bond B b) Bond A is fairly priced compared to Bond B c) Bond A is underpriced compared to Bond B d) None of the above

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