n NISM Certifications
NSM General NISM
Medium

There is no possibility of yield curve spread risk when the term structure shift is _____.

Practice question from NISM Series IV - Mock Test 3 — bank. The correct answer is highlighted below with a full explanation.

Options

  1. A

    Steepening

  2. Parallel

    Correct answer

  3. C

    Flattening

  4. D

    None of the above

Why this is the answer

Yield curve spread risk arises when shifts are steepening or flattening (non-parallel). A parallel shift means all maturities move uniformly, so no spread risk.

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