There Is a Pronounced Association Between Risk Premiums and State

There is a pronounced association between risk premiums and state of the business cycle. We would expect that the yield spread between an Aaa and Baa rated security to:

A) Vary with seasonal factors, but not with fluctuations in employment.
B) Decrease during recessions.
C) Increase during expansions and decrease during recessions.
D) Increase during recessions.
E) None of the above.