Money Markets and Bond Markets货币市场和债券市场.pptVIP

Default Risk Factor One attribute of a bond that influences its interest rate is its risk of default, which occurs when the issuer of the bond is unable or unwilling to make interest payments when promised. U.S. Treasury bonds have usually been considered to have no default risk because the federal government can always increase taxes to pay off its obligations (or just print money). Bonds like these with no default risk are called default-free bonds. Default Risk Factor (cont.) The spread between the interest rates on bonds with default risk and default-free bonds (treasury bonds), called the