On January 1, 2010 the TED (treasury-euro dollar) spread was 0.9%, and on January 31, 2010 the TED spread is 0.4%. As a risk manager, how would you interpret this change?
- The decrease in the TED spread indicates a decrease in credit risk on interbank loans.
- The decrease in the TED spread indicates an increase in credit risk on interbank loans.
- Increase in interest rates on both interbank loans and T-bills.
- Increase in credit risk on T-bills.
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