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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, 08:19 AM

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Galen
4 days ago
I think the credit spread on a corporate bond is the difference in price between the corporate bond and a benchmark treasury bond. That seems to match option B.
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Jacquelyne
5 days ago
I'm a bit confused by the wording of the question. I'll need to read it a few times to make sure I'm interpreting it correctly.
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Vernell
13 days ago
Hmm, I'm not sure about this one. I'll have to think it through carefully to make sure I don't miss anything.
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Nu
16 days ago
I remember from our clinical protocols that not all PVCs require immediate test stoppage. Context matters - frequency and patient symptoms are key.
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Ettie
1 years 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
1 years ago
B) The difference in price between a corporate bond and a benchmark treasury
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Golda
1 years ago
C) The additional yield required by investors to offset the credit risk of the security
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Chuck
1 years ago
A) The increased size of the bid/ask spread in a trade price
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Margot
1 years ago
D? Really? The difference between the coupon rate and the dividend? That's like apples and oranges, man.
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Lewis
1 years ago
B) The difference in price between a corporate bond and a benchmark treasury
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Fausto
1 years ago
C) The additional yield required by investors to offset the credit risk of the security
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Layla
1 years ago
A) The increased size of the bid/ask spread in a trade price
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Naomi
1 years 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
1 years 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
1 years 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
1 years ago
I think the credit spread is the difference in price between a corporate bond and a benchmark treasury.
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Sherly
1 years ago
Definitely B. The difference in price between a corporate bond and a benchmark treasury. Easy peasy!
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Juliana
1 years 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
1 years 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
1 years 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
1 years ago
Agreed. Credit spread is a key factor to consider when evaluating corporate bonds.
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Evangelina
1 years ago
That makes sense. It's important for investors to be compensated for taking on that risk.
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Janae
1 years 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
1 years 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
1 years 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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