The Risk Spread Is

question 64

Multiple Choice

The risk spread is:

• A) The difference between a bond's purchase price and selling price
• B) The difference between the bond's yield and the yield on a U.S. Treasury bond of the same maturity
• C) Less than 0 (zero) for a U.S. Treasury bond
• D) Assigned by a bond-rating agency

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Definitions:

Market Value

The current market rate for acquiring or selling an asset or service openly.

Signature Card

A document signed by an account holder that allows a bank to verify the account holder's signature on checks and other documents.

Authorized Persons

Individuals who are officially permitted to carry out specific actions within an organization or system.

Checks

Written, dated, and signed instruments that direct a bank to pay a specific sum of money to the bearer or a named party.