Question
MULTIPLE CHOICE OAS on a callable bond is 75 basis points using on-the-run treasuries as benchmark rates. Which is correct ? -Cost of the embedded
MULTIPLE CHOICE
OAS on a callable bond is 75 basis points using on-the-run treasuries as benchmark rates. Which is correct?
-Cost of the embedded option is 75 bps
-Cost of the embedded option is 75 bps over the treasuries benchmark
-OAS reflects the credit risk and liquidity risk of the bond over the treasury benchmark rates
-Nominal spread is 75 bps over the treasury benchmark rates ??
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Investments An Introduction
Authors: Herbert B. Mayo
13th Edition
0357127951, 978-0357127957
