Answer: MRR-based Eurodollar futures contract rate and the US T-bill rate.

## Explanation The TED spread is a key indicator of credit risk and liquidity in the financial markets. It is defined as: \[ \text{TED Spread} = \text{3-month LIBOR (or Eurodollar rate)} - \text{3-month US Treasury bill rate} \] In modern terms, since LIBOR has been phased out, it's typically calculated as: \[ \text{TED Spread} = \text{3-month MRR-based rate} - \text{3-month US Treasury bill rate} \] **Key points:** - The TED spread measures the difference between interbank lending rates (which include credit risk) and risk-free government rates - A widening TED spread indicates increased perceived credit risk in the banking system - A narrowing TED spread suggests improving credit conditions **Answer: B**

Author: LeetQuiz Editorial Team