Reading 24 Question 12
In this question they have three comments that you have to choose the correct answer:
1. callable debt has a lower OAS than non-callable.
2. benchmark corporate bond issues normally have wider spreads than older bonds of the same issuer.
3. The announcement of a new corporate bond issue often leads to an increase in the credit spread on the existing bond.
I understand comment 3 is correct, but isn’t the first comment true as well? Is this an error?
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