The yield spread between a non-Treasury security and a Treasury security of comparable maturity is called a:
A) Risk premium.
B) Treasury spread.
C) Income spread.
D) Government option spread.
E) None of the above.

Question

Quizplus · Accepted Answer

The yield spread between a non-Treasury security and a Treasury security of comparable maturity is referred to as a risk premium. This spread compensates investors for the additional risk associated with the non-Treasury security compared to the virtually risk-free Treasury security.

The Yield Spread Between a Non-Treasury Security and a Treasury