What example would illustrate the concept of benchmark spread?

The concept of benchmark spread is illustrated by the yield difference between a 10-year Treasury note and a corporate bond. This is because the benchmark spread typically refers to the difference in yield between a benchmark debt instrument, such as a government bond, and another comparable security, which in this case is a corporate bond.

The 10-year Treasury note serves as a standard or benchmark because it is issued by the government and is considered to have minimal credit risk. Investors often compare the yields of other securities, like corporate bonds, to this benchmark in order to assess risk and return. The spread between these two yields reflects the additional risk (such as credit risk and liquidity risk) associated with investing in the corporate bond over the risk-free Treasury note. Thus, understanding this spread helps investors gauge the relative attractiveness of various investment options in debt markets and guides their investment decisions.