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Consider the following observed bond market returns when answering: Bond Type - 3-month - 10-year US Treasury2.42% 3.26% US AA Corporate 2.58% 3.42% US BBB

Consider the following observed bond market returns when answering:

Bond Type - 3-month - 10-year

US Treasury2.42% 3.26%

US AA Corporate 2.58% 3.42%

US BBB Corporate 3.51% 4.33%

US BB Corporate 5.17% 5.99%

United Kingdom 0.54% 1.29%

Venezuela Sov 334.08% 33.32%

Which of the following interest rate components CANNOT explain the difference in market returns between the 3-month US Treasury and 3-month Venezuela Sovereign bonds?

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