At www.bondsonline.com review the Industrial Spreads for various ratings (click the links on the left-side menus to follow the links to Today’s Markets, Corporate Bond Spreads). These are spreads above U.S. Treasuries of comparable maturities. What factors tend to explain the yield differences? How might these yield spreads differ during an economic boom versus a recession? Solution Answer: The basic reason for this spread is the difference in the credit worthiness of different securities and the companies those who offere them. Other reason for the differences may be the tenure differences, differences in amount involved with the issuances and difference in the situation or period in which the security is offered to the public. During economic boom these yield differences would be very less as compared to recession. The reason being in tmes of recession people tend to discount the values of the firms those issuing these securities more as compare to normal situation. .