Use the following information in answering questions 1 and 2 below.

On April 5, the approximate yield for security A was 7.67%. The yield for security B on the same date was 6.09%.

1. The absolute yield spread is:

A. 1.58%

B. 100 base points

C. 1.78%

D. 165 base points

2. The relative yield spread is:

A. 20.45%

B. 25.94%

C. 23.98%

D. 18.87%

3. With regard to the relationship suggested between credit spreads and the economic well-being of the economy, it can be said that:

A.credit spreads widen in a declining or contracting economy and narrow during economic expansion

B. credit spreads widen in a declining or contracting economy and expand during economic expansion

C. on-the-run yield curves widen in a declining or contracting economy and narrow during economic expansion

D. credit spreads contract in a declining or contracting economy and narrow during economic expansion