The ________,the difference between the interest rate on Baa corporate bonds and U.S. Treasury bonds. rose sharply during the Great Depression.
A)credit boom
B)credit spread
C)adjustable-rate
D)default swap

Question

Quizplus · Accepted Answer

The credit spread, which is the difference between the interest rate on riskier Baa corporate bonds and safer U.S. Treasury bonds, rose sharply during the Great Depression as investors fled from anything deemed risky. This widening credit spread made it difficult for corporations to raise funds and contributed to the overall economic downturn. The credit boom refers to a period of easy credit availability and expansion, while adjustable-rate and default swap are specific financial instruments and not directly related to the question.

The ________,The Difference Between the Interest Rate on Baa Corporate