Market Participants Talk of Interest Rates on Non-Treasury Securities as ________

Multiple Choice

Market participants talk of interest rates on non-Treasury securities as ________ to a particular on-the-run Treasury security (or a spread to any particular benchmark interest rate selected) . This spread reflects the additional risks the investor faces by acquiring a security that is not issued by the U.S. government and, therefore, can be called a ________.

A) "trading at a premium"; risk premium
B) "trading at a spread"; risk premium
C) "trading at a premium"; risk spread
D) "trading at a discount"; discount premium