The benchmark default-free interest rate of the financial system is generally considered to be
A) the federal funds rate.
B) the interest rate on the 10-year Treasury note.
C) the discount rate.
D) the 30-year fixed rate mortgage.

Question

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The benchmark default-free interest rate of the financial system is generally considered to be the interest rate on the 10-year Treasury note, as it represents the rate at which the US government can borrow money for a relatively long time without default risk. The federal funds rate, discount rate, and 30-year fixed rate mortgage are all important interest rates in the financial system, but they are not considered to be the default-free benchmark rate.

The Benchmark Default-Free Interest Rate of the Financial System Is