Question
4. Greece, a country of 11 million people, is facing a crisis due a budget deficit that is 12.7% of GDP. (GDP is the value
4. Greece, a country of 11 million people, is facing a crisis due a budget deficit that is 12.7% of GDP. (GDP is the value of all goods and services produced in the country in a year.) It has a lot of short-term debt that is coming due this month and the government doesnt have the cash on hand to pay. Bond investors are unsure whether they want to buy more Greek government bonds.
Current holders of Greek bonds face which of the following risk and explain why (select one from below)?
inflation risk
interest-rate risk
reinvestment risk
credit risk
funding liquidity risk
The Greek government faces which risk and explain why?
inflation risk
interest-rate risk
reinvestment risk
credit risk
funding liquidity risk
Choose one of the following as the best estimate of the Greek budget deficit and explain why?
$300M
$3B
$30B
$300B
$3T
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