Credit spreads are measured by the difference between the market yields for risky bonds less the yield on Treasury bonds with the same term.

Question

Quizplus · Accepted Answer

This is correct. Credit spreads are calculated as the difference between the yield on risky bonds and the yield on Treasury bonds of the same term. The greater the credit spread, the riskier the bond is perceived to be.

Credit Spreads Are Measured by the Difference Between the Market