As a factor explaining yield differences among U.S. government bonds, default risk is
A) always an important consideration.
B) important, but other factors such as market risk are more critical.
C) more important than soverign risk.
D) practically never a consideration.

Question

Quizplus · Accepted Answer

U.S. government bonds are considered to have virtually no default risk because they are backed by the full faith and credit of the U.S. government, making default risk practically never a consideration in their yield differences. Other factors, such as interest rate risk and inflation risk, are more relevant.

As a Factor Explaining Yield Differences Among U