Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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Question
OAS on a callable bond is 75 basis points using on-the-run treasuries as benchmark rates. Which is correct? OA. Cost of the embedded option is 75 bps B. Cost of the embedded option is 75bps over the treasuries benchmark OC. OAS reflects the credit risk and liquidity risk of the bond over the treasury benchmark rates OD. Nominal spread is 75 bps over the treasury benchmark rates.
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Transcribed Image Text:OAS on a callable bond is 75 basis points using on-the-run treasuries as benchmark rates. Which is correct? OA. Cost of the embedded option is 75 bps B. Cost of the embedded option is 75bps over the treasuries benchmark OC. OAS reflects the credit risk and liquidity risk of the bond over the treasury benchmark rates OD. Nominal spread is 75 bps over the treasury benchmark rates.
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