During recessions, yield spreads tend to:
A) narrow, whereas they generally widen during economic expansions.
B) widen, whereas they generally narrow during economic expansions.
C) narrow and they also generally narrow during economic expansions.
D) widen and they also generally widen during economic expansions.

Question

Quizplus · Accepted Answer

During recessions, yield spreads tend to widen as investors demand higher yields for riskier assets, while during economic expansions, they narrow as confidence in the economy increases.

During Recessions, Yield Spreads Tend To