What Would You Expect to Have Happened to the Spread

question 75

Multiple Choice

What would you expect to have happened to the spread between yields on commercial paper and Treasury bills immediately after September 11,2001?

• A) No change, as both yields will remain the same.
• B) Increase, the spread usually increases in response to a crisis.
• C) Decrease, the spread usually decreases in response to a crisis.
• D) No change, as both yields will move in the same direction.

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Definitions:

Evaluation Solutions

The process of critically assessing and determining the effectiveness of strategies, interventions, or programs to solve specific problems or meet objectives.

Confirmation Bias

The tendency to search for and use information that supports one’s ideas rather than refutes them.

Hindsight Bias

The tendency to report falsely, after the fact, that one has accurately predicted an outcome.

Selection Bias

The bias that occurs when the subjects or conditions chosen for a study do not represent the target population, affecting the validity of outcomes.