The difference between the yield on local government bonds and the yield on corresponding domestic government treasury bonds is known as
A)sovereign spread.
B)the foreign discount rate.
C)interest expense.
D)the risk free rate.
E)interest rate risk.

Question

Quizplus · Accepted Answer

The yield difference between local government bonds and domestic government treasury bonds is called the sovereign spread. It reflects the perceived risk and creditworthiness of the local government compared to the domestic government.

The Difference Between the Yield on Local Government Bonds and the Yield