The yield on commercial paper is ____ the yield of Treasury bills of the same maturity. The difference between their yields would be especially large during a ____ period.

Question

Quizplus · Accepted Answer

Commercial paper typically offers a higher yield than Treasury bills because it carries a higher risk, being an unsecured form of promissory note issued by corporations. The difference in yields would be especially large during a recessionary period because investors demand a higher premium for assuming the increased risk of default associated with commercial paper in such economic conditions.

The Yield on Commercial Paper Is ____ the Yield of Treasury