official SCHWESER reasoning on why maturities on debt are shorter in japan: Companies in developed countries tend to use more debt with longer maturities than firms in emerging markets, thus companies in the U.S. tend to use longer maturity debt than companies in Japan. I’m getting annoyed w/ poorly written questions
The Schweser girl should know better
Schweser is wrong on this one. Anyone who works in Fixed Income knows that Japan is NOT considered a EM. In fact most funds explicitly say they trade in Asia ex-Japan b/c Japan is the only real mature market out in the far east.
what’s really annoying is that I specifically remember another question reasoning that debt maturities are typically longer in Japan b/c they have lower inflation rates. arhhhh
just pray Japan isnt in the text and they talk in abstracts like “Abubutia is a emerging market…”
just remember that debt structure is different
CFAI is clearer about this, Japan has a different debt structure which is explained quite clearly. Schweser mixes it up with the next relevant section which says that emerging markets have more debt.