Final answer:
The quality spread differential (QSD) is the difference in default-risk premiums between different types of debt, typically fixed-rate and floating-rate. The correct statements regarding QSD are that it is the difference between default-risk premiums on different debt types and that not all parties can have a positive QSD.
Step-by-step explanation:
A quality spread differential (QSD) refers to the difference in the default-risk premiums between two types of debt, which usually involves fixed-rate and floating-rate debt instruments. Essentially, it reflects the additional yield an investor demands for taking on the additional credit risk of a bond with a lower credit quality compared to one with higher credit quality.
Regarding the given statements:
a. This statement is correct. The QSD is indeed the difference between the default-risk premium on fixed-rate debt and the default-risk premium on floating-rate debt.
b. This statement is also true. It is not always possible for all parties in the financial markets to achieve a positive quality spread differential, as it relies on differential movements in the spreads of various debt instruments.
c. This statement is false. The quality spread differential is not a sum divided by a differential; it's the simple difference between the default-risk premiums of two debts.
Therefore, the correct statements regarding quality spread differential are a and b.