Asked by Tatiana Cortes on Apr 28, 2024
Verified
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, as the spread usually increases in response to a crisis
C) decrease, as the spread usually decreases in response to a crisis
D) no change, as both yields will move in the same direction
Commercial Paper
An unsecured, short-term debt instrument issued by corporations, typically used for the financing of inventory, accounts receivable, and meeting short-term liabilities.
Treasury Bills
Short-term government securities issued at a discount from the face value and mature in a year or less, representing a secure, low-risk investment option.
September 11
A date marking significant terrorist attacks in the United States in 2001, leading to widespread global economic and political effects.
- Discern and tally interest rates in multiple financial situations.
Verified Answer
Learning Objectives
- Discern and tally interest rates in multiple financial situations.
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