Hi all, I need help understanding the last 2 lines of this answer. Why would we buy the bond with the biggest OAS? Your answer: A was correct! “When the yield curve is perfectly flat, all spot interest rates are equal, and the spot rates will equal the YTM of the bond. The static spread and the YTM spread will diverge when the yield curve gains shape (upward-sweeping, humped, or downward-sweeping). The option-adjusted spread is the spread without the option. Hence, to compare the relative valuation of these two securities, we would compare their OAS and buy the bond with the biggest OAS (B).”