So the last question in chapter 29 is about the OAS and using it to value speculative grade bonds. 1) Does anyone have any notes on this? All the CFA book and Schweser say is that it is the spread with the optionality removed, yet I just missed a question because I selected that after the option value is remove that the default risk is still there… So anyone got any more material on what is in the OAS, because the books don’t seem to? Why is the default risk not in still left after the option value is removed? That doesn’t even make sense…
Sorry for repeating the thread…thanks for the link…