Question: TED spread, is defined as the differential between the overnight LIBOR interest rate and the 3-months U.S. Treasury bill rate. Considering the September and October

TED spread, is defined as the differential between the overnight LIBOR interest rate and the 3-months U.S. Treasury bill rate. Considering the September and October 2008 period.

Discuss and explain the two reasons why TED spread widens dramatically at some particular days.

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