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VashaNatasha [74]
3 years ago
14

As a general rule what percentage of debt to gdp will make a government bond yields spike

Business
2 answers:
Andreyy893 years ago
5 0

There is NO general rule for the percentage of debt to gdp that will make a government bond yields spike

Studentka2010 [4]3 years ago
3 0

Answer:

There is no general debt-to-gdp ratio rule because a bond yield depends on many other factors, not only on debt-to-gdp ratio.

For example, the United States has a very high debt-to-gdp ratio of over 100%, but the US bond is considered to be the safest bond in the market, has a high credit rating of AA+ according to Firtch, Moody's and S&P, and is a cheap bond because interest rates in the US are low, so the coupon payments are low as well.

The yield to maturity of a 10 year US bond is around 2%. Therefore, what all this information is telling us, is that even if debt-to-gdp ratio in the US continues to increase, the US bonds yields will probably continue to be stable. They will not spike because the debt-to-gdp ratio increases.

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grin007 [14]

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3 years ago
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3 years ago
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ZanzabumX [31]

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total amortization expense = $5400

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to find out

total amortization expense

solution

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