Question: The next graph shows the interest rate spread between two commercial papers, i.e., A2/P2 rate less AA rate. This is the spread between high and

The next graph shows the interest rate spread between two commercial papers, i.e., A2/P2 rate less AA rate. This is the spread between high and low quality 30 day nonfinancial commercial paper. In other words, the spread is the risk premium.

Why do you think the rate spread was greater during 2001-2002 and 2007-2009 compared to 2003-2006?

How much is the spread these days? Use the following website to find the current information.

Try The Federal Reserve for the commercial paper interest rates.

Thirty-day A2/P2 less AA nonfinancial commercial paper (daily) Basis points spread spread, 5-day moving avg 2001 2003 2005 2007 2009 2011

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