The two sectors that are normally regarded as the lowest risk in the financial market are
A)T-bills and loans extended to "PIIGS" countries.
B)demand deposits and loans to countries that have taken austerity measures.
C)household mortgages and government debt.
D)government debt and foreign company borrowings.

Question

Quizplus · Accepted Answer

Household mortgages are typically regarded as low risk because they are secured by real estate assets and the borrower has a strong incentive to make payments on time to avoid default. Government debt is also considered low risk because governments have the ability to generate revenue through taxes and can print money to pay off their debts.

The Two Sectors That Are Normally Regarded as the Lowest