tarik64

I believe that nominal spread and Z spread are aprox the same. (Schweser pg 79 Book 5) Rearrange that equation and you get nominal sprad - option cost = OAS; substitute Z spread for nominal and their you go.
Yes, I would rather have seen them put in Z spread on that as well. Another error is on the FSA section for Measure of earnings quality. They have the arrow pointing up; should point down.
Hope that helps