If the fixed-rate of a five-year fixed-for-float LIBOR swap is 2.5%, and the five-year Treasury is yielding 2.0%, the swap spread is:

A. 25 bps
B. 50 bps
C. 75 bps

Correct Answer: B

2.5% - 2.0% = 0.5%

As a reflection of risk, swap spreads are often used to assess the creditworthiness of participating parties.