1. The credit ratings of five countries, Brazil, Colombia, Poland, Russia, and Ukraine, and the yield curves associated with their USD-nominated bonds are shown below:

Country Credit Ratings (S&P)

Brazil BBB-

Colombia BBB

Poland A-

Russia BB+

Ukraine CCC-

Consider the market interest rates of the 10-year bonds issued by the five countries. The rate on the bonds issued by Poland is 6.2%, and by Russia is 7.1%. Which of the following statements is most likely true?

a. The market interest rate is below 7.1% for Ukraine and above 6.0% for Colombia.

b. The market interest rate is above 7.0% for Brazil and above 6.2% for Colombia.

c. The market interest rate is below 7.3% for Colombia and above 6.2% for Brazil.

d. The market interest rate is below 6.9% for Ukraine and above 6.5% for Colombia.

e. None of the above