The Static Spread Is

question 16

Multiple Choice

The static spread is:

• A) the difference between the yield on a zero coupon bond and the yield on a coupon bond.
• B) the difference between a fixed-rate yield and a floating-rate yield.
• C) the difference between the yield on new Treasury bills versus new Treasury bonds.
• D) the difference between expected inflation and the current Treasury bill rate.
• E) the difference between the yield on a security with options and the yield on a maturity-matched zero coupon Treasury security.

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Definitions:

GAAP

Generally Accepted Accounting Principles, a set of accounting standards and procedures used in the U.S. to govern financial reporting and ensure consistency.

Accounting Standards

Rules and guidelines used in the preparation and presentation of financial statements to ensure accuracy, completeness, and consistency.

Asset

Anything of value owned by a company.

Business

All profit-seeking activities and enterprises that provide goods and services necessary to an economic system.