The Difference Between the Swap Rate and the Rate on a Treasury

question 7

Multiple Choice

The difference between the swap rate and the rate on a Treasury security of the same maturity is called the

• A)swap spread
• B)risk premium
• C)swap basis
• D)settlement spread
• E)LIBOR

---

Definitions:

Distributed

The process of spreading things or people over a wide area or among a large number of recipients.

Enthymeme

A rhetorical form of argument wherein one premise is not explicitly stated, relying on the audience's ability to fill in the gap.

Validity

A property of logical or analytical statements where the conclusion logically follows from the premises.

Unstated Premise

An implicit assumption or belief that is not explicitly expressed but is necessary for an argument's conclusion to hold.