The difference between LIBOR and the Treasury-bill rate a. was very low just before the 2008...
The difference between LIBOR and the Treasury-bill rate
a. was very low just before the 2008 financial crisis.
b. measures credit risk in the banking sector.
c. is called the TED spread.
d. All of the options.
Homework Answers
The difference between LIBOR and the Treasury-bill rate
d. All of the options.
Explanation:
All the options are true about the difference between the rates.
It measures credit risk of banks as TB rates are risk less and the difference with bank interest rate signifies risks taken by banks. The difference was low before the crisis.
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