Which of the Four Major Yield Spreads Defines the Difference

question 86

Multiple Choice

Which of the four major yield spreads defines the difference in yields between pure government agency bonds and corporate bonds?

• A) Segments
• B) Sectors
• C) Coupons
• D) Seasoning
• E) Maturity

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Definitions:

Average Net Income

The mean amount of net earnings calculated over a specified period, indicating the profitability of a business after all expenses have been subtracted from revenues.

Accounting Return

A measure of profitability in relation to various accounting measures, such as net income or assets.

Average Accounting Return (AAR)

An investment’s average net income divided by its average book value.

Return on Equity (ROE)

A measure of financial performance calculated by dividing net income by shareholders' equity, reflecting the profitability relative to the equity.