The Credit Spread Cannot Be Negative

question 68

True/False

The credit spread cannot be negative.

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Definitions:

Coefficient of Determination

A statistical measure represented by R^2, which shows the proportion of variance in the dependent variable that is predictable from the independent variables.

Sum of Squares

A statistical measure that quantifies the variance or dispersion of a set of numbers by summing the squared differences between each number and the mean.

Error SSE

The sum of squared errors (SSE) is a measure used in statistics to quantify the discrepancy between the data and an estimation model.

Coefficient of Determination

A statistical measure that expresses the proportion of variance in the dependent variable that can be predicted from the independent variable(s).