What is the likely cause of an interest rate spread for similar assets denominated in the same currency?
A) There is doubt that the currency's value will hold.
B) It is due to the country risk where the assets are originated.
C) It depends on the geographic difference between borrowers and lenders.
D) It is because in some markets, the middlemen "take" more of a cut.

Question

Quizplus · Accepted Answer

The interest rate spread for similar assets denominated in the same currency is likely due to the country risk where the assets are originated. This means that there is a perceived higher risk associated with investing in a particular country, leading to higher interest rates being offered to compensate for that risk.

What Is the Likely Cause of an Interest Rate Spread