If the promised yield on 60-day commercial paper is 2.5 percent and the promised yield on a 60-day T-bill is 2.0 percent, the promised yield spread is closest to:
A) 0.50%
B) 2.00%
C) 2.50%
D) 5.00%

Question

Quizplus · Accepted Answer

The promised yield spread is calculated by subtracting the yield on one security from another. In this case, it's the yield on commercial paper minus the yield on a T-bill, which is 2.5% - 2.0% = 0.50%.

If the Promised Yield on 60-Day Commercial Paper Is 2