Yields on a dollarized countys U.S. dollar-denominated sovereign bonds should be lower

than yields on the dollar-denominated sovereign bonds of a country with the same credit rating and its own currency because:

1. They do not reflect expected currency depreciation.
2. They do not contain a risk premium in compensation for the uncertainty about future currency movements.
3. They do not contain a risk premium in compensation for the risk of a currency crisis.
4. (b) and (c)