4. Yield Spreads (risk premium). 1) What is "flight to quality"? (3 points) 2) Referring to the following figure from Roche Holdings AG case, what had caused the yield spreads widen during the crisis? (5 points) 10.00 9.00 8.00 7.00 Yield (%) 6.00 5.00 4.00 3.00 Feb-09 2.00 Feb-06 Aug 06 Feb-07 Aug-07 Feb-08 Aug-00 Mergent Corporate Bond Yield Average - Baa Rating Mergent Corporate Bond Yield Average - Aa Rating U.S. Treasures 30-Year Yield De Dutasta Meent Bord Record 3) Among the three types of bond yields, which one has the highest yield? Why? (2 points)