Paula, a Citizen of Spain, Decides to Purchase Bonds Issued

Multiple Choice

Paula, a citizen of Spain, decides to purchase bonds issued by Columbia instead of Canadian bonds, even though the Columbian bonds have a higher risk of default. What might be an economic reason for her decision?

A) Columbia has a lower inflation rate.
B) The Columbian bonds pay a higher rate of interest.
C) The Canadian government is more stable than the Columbian government.
D) Columbian bonds have shorter maturity periods than Canadian bonds.