What is true of both the U.K. and the U.S. in terms of credit?

Prepare for the Bloomberg Market Concepts Exam. Use flashcards and multiple-choice questions. Each question provides hints and explanations to boost your BMC exam readiness!

Both the U.K. and the U.S. are considered highly creditworthy due to their stable economies, strong financial markets, and robust legal institutions. This high creditworthiness is reflected in their sovereign credit ratings, which are generally rated among the highest by major credit rating agencies. Investors view government bonds from these countries as low-risk assets, contributing to their reputation and ensuring that they can borrow at lower costs compared to other nations.

In contrast, the other options do not accurately reflect the financial and economic situations in the U.K. and the U.S. While both nations may engage in international relations that include sanctions, this is not a defining feature of their overall creditworthiness. Furthermore, declaring that both countries have low credit ratings and heavily rely on foreign debt inaccurately characterizes their financial systems, as both countries enjoy a high level of trust from investors and maintain relatively low levels of external debt as a percentage of their GDP compared to many other countries.

Subscribe

Get the latest from Examzify

You can unsubscribe at any time. Read our privacy policy