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ICMA Exam FMFQ Topic 6 Question 62 Discussion

Actual exam question for ICMA's FMFQ exam
Question #: 62
Topic #: 6
[All FMFQ Questions]

What is the credit spread on a corporate bond?

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Suggested Answer: C

by Marsha at Jul 16, 2024, 07:19 AM

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Ettie
3 months ago
I heard the credit spread on corporate bonds is just the amount of tears shed by the poor saps who bought them.
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Lavera
2 months ago
B) The difference in price between a corporate bond and a benchmark treasury
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Golda
2 months ago
C) The additional yield required by investors to offset the credit risk of the security
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Chuck
3 months ago
A) The increased size of the bid/ask spread in a trade price
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Margot
3 months ago
D? Really? The difference between the coupon rate and the dividend? That's like apples and oranges, man.
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Lewis
3 months ago
B) The difference in price between a corporate bond and a benchmark treasury
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Fausto
3 months ago
C) The additional yield required by investors to offset the credit risk of the security
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Layla
3 months ago
A) The increased size of the bid/ask spread in a trade price
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Naomi
4 months ago
Hmm, I'm torn between B and C. I guess I'll go with C, just to be safe. Credit risk, you know?
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Joni
2 months ago
I'm torn between B and C. I guess I'll go with C, just to be safe. Credit risk, you know?
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Lang
3 months ago
I'm not sure, I thought it was the additional yield required by investors to offset the credit risk of the security.
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Slyvia
3 months ago
I think the credit spread is the difference in price between a corporate bond and a benchmark treasury.
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Sherly
4 months ago
Definitely B. The difference in price between a corporate bond and a benchmark treasury. Easy peasy!
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Juliana
4 months ago
Yes, that's correct. The credit spread reflects the risk of default by the issuer, which is why investors demand a higher yield.
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Ariel
4 months ago
Hmm, that makes sense. So it's more about the risk associated with the bond rather than just the price difference?
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Ellen
4 months ago
I think the correct answer is C. The additional yield required by investors to offset the credit risk of the security.
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Lacey
3 months ago
Agreed. Credit spread is a key factor to consider when evaluating corporate bonds.
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Evangelina
3 months ago
That makes sense. It's important for investors to be compensated for taking on that risk.
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Janae
4 months ago
I think the correct answer is C. The additional yield required by investors to offset the credit risk of the security.
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Gearldine
4 months ago
I disagree, I believe it's the additional yield required by investors to offset the credit risk of the security.
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Ariel
4 months ago
I think the credit spread on a corporate bond is the difference in price between the bond and a benchmark treasury.
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