AIWMI Exam CCRA-L2 Topic 9 Question 86 Discussion

Actual exam question for AIWMI's CCRA-L2 exam

Question #: 86
Topic #: 9

The following information pertains to bonds:

Further following information is available about a particular bond 'Bond F'

There is a 10.25% risky bond with a maturity of 2.25% year(s) its current price is INR105.31, which corresponds to YTM of 9.22%. The following are the benchmark YTMs.

From the time January 2013 to April 2013, what can you predict about the market conditions, assuming the GSec has not changed?

AThere has been credit spread compression, which means the spreads have declines, which can be lead indicator of oncoming economy stress.

BThere has been widening of credit spread, which means the spreads have increased, which can be lead indicator of oncoming economy stress.

CThere has been widening of credit spread, which means the spreads have increased, which can be lead indicator of oncoming economy stress.

DThere has been credit spread compression, which means the spreads have declines, which can be lead indicator of oncoming economy boom.

Show Suggested Answer

Suggested Answer: B

by Ardella at Apr 28, 2024, 02:34 PM

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Brynn

12 days ago

The question is asking about the market conditions based on the changes in the credit spread for a particular bond. Option C seems to be the correct answer, as the information provided indicates that the credit spread has widened, which can be a lead indicator of an upcoming economic stress.

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