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10 March, 18:10

What is a credit spread? A. The difference between the net worth of a borrower and the amount of the loan the borrower would like to secure. B. The difference between a borrower's credit score and the score of the most credit-worthy borrower. C. The difference between interest rates on loans to households and businesses and interest rates on completely safe assets such as U. S. Treasury bonds. D. The difference between the interest rate on corporate bonds with different maturities.

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  1. 10 March, 20:57
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    Answer: Option C

    Explanation: In simple words, credit spread refers to the yield between two bonds having same maturity but different credit quality.

    The interest rate on bonds given to households and business are not safe as they'er is a high probability of payment loss but treasury bonds are safe as it have guarantee of Government of the country.

    Hence the correct option is C.
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Home » Business » What is a credit spread? A. The difference between the net worth of a borrower and the amount of the loan the borrower would like to secure. B. The difference between a borrower's credit score and the score of the most credit-worthy borrower. C.
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