yields!!!

An analyst is comparing 2 bonds and has collected the following data: BOND A: nominal spread of 125 BP, zero-volatility spread of 125 BP, and OAS of 65 BP BOND B: nominal spread of 95 BP, zero-volatility spread of 95BP, and OAS of 95BP Each bond is similar in all respects except that A is a mortgage passthrough security and B is a non callable corp. bond. which statement is accurate: A.the yield curve is perfectly flat B.the OAS measures the relative curvature of the yield curve and its effect on option cost (OAS stands for option adjusted spread)

A.the yield curve is perfectly flat when the yield curve is flat nominal spread = z-spread

supersharpshooter Wrote: ------------------------------------------------------- > A.the yield curve is perfectly flat > > when the yield curve is flat nominal spread = > z-spread Agree!!!

right! good job :slight_smile: