A widening of the yield spread between the yield-to-maturity on a BBB-rate bond and that on a AAA-rated bond indicates
A) an increase in the default premiums of the BBB class.
B) an increase in the default premiums of two bond classes.
C) a decrease in the level of market risk aversion.
D) the economic climate has turned more favorable.

Question

Quizplus · Accepted Answer

The Answer of A widening of the yield spread between the yield-to-maturity on a BBB-rate bond and that on a AAA-rated bond indicates
A) an increase in the default premiums of the BBB class.
B) an increase in the default premiums of two bond classes.
C) a decrease in the level of market risk aversion.
D) the economic climate has turned more favorable.

A Widening of the Yield Spread Between the Yield-To-Maturity on a BBB-Rate