Business, 18.11.2020 17:20 bren04

Suppose your foreign government, threatened with bankruptcy, decided to tax the interest income on its own bonds as part of an effort to rectify serious budgetary woes. What would you expect to see happen to the yields on these bonds? a. You would expect the yields to rise due to increased default risk.
b. You would expect the yields to fell due to decreased default risk.
c. You would expect the yields to rise to compensate investors for the loss of the tax-exempt status.
d. You would expect the yields to fell due to increased default risk.

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Suppose your foreign government, threatened with bankruptcy, decided to tax the interest income on i...