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2#
发表于 2011-7-13 15:26
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Reference rate = the rate for an "unsafe" investment (like a corporate bond)
Treasury rate = risk free rate
Reference rate = Treasury Rate + spread
It's really simple. You need to be paid a higher rate if the holder of your money is less safe. That is why there is a positive spread over treasuries. Don't be confused because it's a "swap" spread. The swap market is just a market where you can observe spreads. The spreads can be applied to other investments. |
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