Assume that countries A and B are of similar size, that they have similar economies, and that

the government debt levels of both countries are within reasonable limits. Assume that the

regulations in cou

ntry A require complete disclosure of financial reporting by issuers of debt in

that country, but that regulations in country B do not require much disclosure of financial

reporting. Explain why the government of country A is able to issue debt at a lower

cost than the

government of country B.

a. Investors are more willing to invest in debt securities issued by the government of country A

because there is less transparent information that would suggest country A can cover its

payments owed on its debt

b.

Investors are more willing to invest in debt securities issued by the government of country A

because there is more transparent information that would suggest country A can cover its

payments owed on its debt

c. Investors are more willing to invest in

debt securities issued by the government of country A

because there is more transparent information that would suggest country B can cover its

payments owed on its debt