What is an indicator of the extent of risk in financial systems?
A) the difference between the unemployment rate and the natural rate of unemployment
B) falling commodity prices
C) the spread between the monthly U.S. T-bill yield and LIBOR rate
D) the spread between inflation-indexed and nonindexed U.S. bonds
E) the number of banks applying for federal assistance

Question

Quizplus · Accepted Answer

The spread between the monthly U.S. T-bill yield and LIBOR rate is an indicator of the extent of risk in financial systems. A wider spread suggests higher perceived risk in financial markets, while a narrower spread suggests lower perceived risk. This spread is often used as a measure of liquidity and investor confidence in financial markets.

What Is an Indicator of the Extent of Risk in Financial