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

Multiple Choice

Catherine, a citizen of Spain, decides to purchase bonds issued by Chile instead of ones issued by the United States even though the Chilean bonds have a higher risk of default. An economic reason for her decision might be that

A) she dislikes U.S. foreign policy.
B) the Chilean bonds pay a higher rate of interest.
C) the U.S. government is more stable than the Chilean government.
D) None of the above provide an economic reason for buying the riskier bond.