Which of the following statements is correct?
A)Yield spreads between bonds of different quality remain static over time.
B)Yield spreads are set by the Securities Exchange Commission.
C)Yield spreads between bonds of different quality change over time.
D)None of these statements is correct.

Question

Quizplus · Accepted Answer

Yield spreads between bonds of different quality change over time. Yield spreads reflect changes in the perceived credit risk of the issuer and other market factors, and therefore are not static. The Securities Exchange Commission does not set yield spreads between bonds.

Which of the Following Statements Is Correct