Many quotes for fixed-income securities include information on the spread that is the return on a bond less the ____ rate.
A) Inflation
B) Prime interest
C) Compatible Treasury security
D) Money market
E) Bank

Question

Quizplus · Accepted Answer

The spread on a bond is typically measured as the difference between the bond's yield and the yield on a comparable Treasury security. This spread reflects the risk premium investors require to hold a bond that is not backed by the creditworthiness of the US government.

Many Quotes for Fixed-Income Securities Include Information on the Spread