Which of the Following Is NOT a Benefit of the Spline

question 4

Multiple Choice

Which of the following is NOT a benefit of the spline method of estimating discount functions across a spectrum of maturities?

• A)Splines allow fitting curves flexibly to a high degree of fit.
• B)Splined curves are continuous.
• C)Spot and forward rates obtained from splined curves are always smooth.
• D)Splined curves allow fitting linear functions of maturity between knot points.

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