ken hanly wrote: > Why is it that when the U.S. dollar is downgraded US treasury bond yields > decline. > Why does not the yield go up and borrowing become more expensive when the risk > increases?
Risk? Let me give you a definition of what risk is in three steps: 1) Define an event; 2) Associate a probability with which that event can occur, if you can; 3) Then define risk as that probability of that event occurring. This is what risk is to my understanding. Such as, if I smoke three packs of cigarettes per day, say, at the age of 27, my risk of dying in the next two months is 0.001 per cent. But if I smoke three packs of cigarettes per day, say, at the age of 67, my risk of dying in the next two months is 10 per cent, especially if my MR shows some tumors in my lung and all of these things. What is the risk of the US not paying its debt in the next, say, two years, at the moment? Best, Sabri _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
