Banking · Credit Risk Management
In credit risk management, credit spread analysis is important because it helps assess the risk premium required by investors over risk-free benchmarks. A widening credit spread generally implies:
Verified Solution4 OptionsUpdated: October 2026👁️1 View
Share:
- 1a proportional reduction in the volatility of the asset's market price.
- 2that the underlying security has reached its maximum maturity period.
- 3a complete elimination of the risk-adjusted return requirements.
- 4an increase in the perceived default risk or a decline in the issuer's creditworthiness.✓
Correct answer
an increase in the perceived default risk or a decline in the issuer's creditworthiness.
Download Single Question PDF
Save this question and verified answer as a clean study sheet with live clickable link.
👥
Share with Friends & Study Groups
Challenge your peer aspirants on WhatsApp or Telegram to solve this question!
Online Test Series
Start Free Mock Test →Preparing for Banking?
Practice full-length mock tests with real exam timers, instant score analysis, and all-India ranking.
Chapter Practice
Practice Credit Risk Management MCQs →Want more practice questions on Credit Risk Management?
Solve complete topic-wise tests with detailed solutions on GkGet.
Related Practice Questions
Recommended practice questions in Banking · Credit Risk Management