问

问题如下：

A manufacturing company receives a ratings upgrade and the price increases on its fixed-rate bond. The price increase was most likely caused by a(n):

选项：

A.

decrease in the bond’s credit spread.

B.

increase in the bond’s liquidity spread.

C.

increase of the bond’s underlying benchmark rate.

解释：

A is correct.

The price increase was most likely caused by a decrease in the bond’s credit spread. The ratings upgrade most likely reflects a lower expected probability of default and/or a greater level of recovery of assets if default occurs. The decrease in credit risk results in a smaller credit spread. The increase in the bond price reflects a decrease in the yield-to maturity due to a smaller credit spread. The change in the bond price was not due to a change in liquidity risk or an increase in the benchmark rate.

考点：Credit and Liquidity Spread

解析：A选项：credit spread，即信用溢价。spread加在折现率中，credit spread的降低使得折现率变小，债券价格就会上升。因此选项A正确。

B选项：liquidity spread，即流动性溢价。spread加在折现率中，liquidity spread的增加使得折现率变大，债券价格就会下降。因此选项B不正确。

C选项：benchmark rate的增加使得分母变大，债券价格下降，因此选项C不正确。