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hi @Reena and @Alta12
so yea only statement that is correct is statement 3 for the following reasons.
It seems you both agree that statement 1 is incorrect so I won’t explain that one.
Statement 2 Statement 2: Callable corporate bonds and MBS should be measured using OAS. is correct but the actual question says Callable corporate bonds and mortgage-backed securities should be measured using the option-added spread which doesn’t mean anything because that isn’t a methodology.
Hope that helps @Alta12