Question at position 33 Bonds issued by the U.S. Treasury and other developed central governments are viewed as having little to no default risk. Bonds issued by the U.S. Treasury and other developed central governments are viewed as having little to no default risk. TrueFalse

Question

BlackTom AI · Accepted Answer

The question asks about the credit risk of bonds issued by the U.S. Treasury and other developed central governments.
Option 1: True. This statement asserts that such bonds have little to no default risk. In financial theory and practice, debt issued by highly developed economies with strong fiscal frameworks, deep and liquid markets, and credible backstops is typically considered to carry very low default risk. Investors often designate U.S. Treasuries as a benchmark for risk-free rate due to the perceived likelihood that the government will meet its debt obligations.
Option 2: False. This claim would be incorrect if taken to mean there is any meaningful possibility of default on Treasuries or similar developed-nation government bonds. While no investment is absolutely risk-free, the conventional view is that default risk is minimal for U.S. Treasuries and similar government bonds in established economies, which makes this option inaccurate in most contexts.
Option 3: (Not applicable here since this is a two-option multiple-choice setup, but if considered, it would require introducing another distinct stance about default risk that is not commonly held for developed-country government bonds.)
Option 4: (Also not applicable for the same reason; focusing on a different dimension such as liquidity or currency risk would still not negate the core assertion about default risk being very low.)
In summary, the prevailing understanding in fixed income is that U.S. Treasury and other developed-central-government bonds carry minimal default risk relative to corporate or emerging-market bonds, which is why they are often used as risk-free benchmarks. However, real-world considerations like fiscal surprises, political events, or rare sovereign crises can still influence perceptions of risk, although the baseline view remains that default risk is very low.

Question at position 33 Bonds issued by the U.S. Treasury and other developed central governments are viewed as having little to no default risk. Bonds issued by the U.S. Treasury and other developed central governments are viewed as having little to no default risk. TrueFalse

View Explanation

Log in for full answers

Similar Questions

Bonds issued by the U.S. government:

…………是一种短期金融担保，是政府在到期日向债券持有人支付定期票息和面值的承诺。

Part 1Match (by number) each capital market instrument with its description:Part 2[table] Capital Market Instrument | Government Security | enter your response here [/table]

Treasury bonds are

Treasury bonds are

Treasury bonds are

Question at position 34 Bonds issued by the U.S. Treasury and other developed central governments are viewed as having little to no default risk. Bonds issued by the U.S. Treasury and other developed central governments are viewed as having little to no default risk. TrueFalse

More Practical Tools for Students Powered by AI Study Helper

Homework AI Solver

Stylized AI Paper Writer

Plagiarism Checker Assistant

Citation AI Academic Writing Tool

In-Class Translation Assistant

AI Note Generator

AI Quiz Answers

Past Exam Questions from University Test Bank

Smart Practice Assistant

Adaptive Practice

Making Your Study Simpler

Question at position 33 Bonds issued by the U.S. Treasury and other developed central governments are viewed as having little to no default risk. Bonds issued by the U.S. Treasury and other developed central governments are viewed as having little to no default risk. TrueFalse

View Explanation

Log in for full answers

Similar Questions

Bonds issued by the U.S. government:

…………是一种短期金融担保，是政府在到期日向债券持有人支付定期票息和面值的承诺。

Part 1Match​ (by number) each capital market instrument with its​ description:Part 2[table] Capital Market Instrument | Government Security | enter your response here [/table]

Treasury bonds are

Treasury bonds are

Treasury bonds are

Question at position 34 Bonds issued by the U.S. Treasury and other developed central governments are viewed as having little to no default risk. Bonds issued by the U.S. Treasury and other developed central governments are viewed as having little to no default risk. TrueFalse

More Practical Tools for Students Powered by AI Study Helper

Making Your Study Simpler

Part 1Match (by number) each capital market instrument with its description:Part 2[table] Capital Market Instrument | Government Security | enter your response here [/table]