Question
If you want a spread versus the swap curve rather than a government bond curve, which spread is appropriate?
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Answer
I-spread.
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Question
If you want a spread versus an on-the-run government bond, which spread should you use?
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Answer
G-spread.
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Question
If a bond's spread over its benchmark widens, what does that usually imply about required compensation for risk?
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Answer
More compensation for risk is required.
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Question
If two otherwise similar bonds differ only because one is callable, how should its OAS compare with its Z-spread?
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Answer
Its OAS should be lower than its Z-spread.
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