question archive The coupon-equivalent yield is higher interest rates than the discount yield of a 91-day Treasury bill with the gap at Select one: a
The coupon-equivalent yield is higher interest rates than the discount yield of a 91-day Treasury bill with the gap at Select one: a
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The coupon-equivalent yield is higher interest rates than the discount yield of a 91-day Treasury bill with the gap at Select one:
a. Lower, widening
b. Greater, narrowing
c. Greater, widening
d. Lower, narrowing
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Solution
With higher interest rates the gap will widen between the coupon yield and discount yield.
Also coupon yield will be greater than the discount yield of a 91-day T-bill
Hence Greater widening
