An interest rate spread is the difference between an interest rate on a risky asset and the corresponding interest rate on a risk-free treasury security.

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This statement is true. The interest rate spread is the difference between the yield on a risky asset, such as corporate bonds or a high-yield savings account, and the yield on a risk-free asset, such as a treasury security. The spread reflects the additional compensation investors demand for taking on the higher risk associated with the risky asset.

An Interest Rate Spread Is the Difference Between an Interest