Part $1$

In$2020,$ the U$.$S$.$ Treasury was considering issuing bonds that$$ wouldn't mature for $50$ years. Some European governments have begun issuing bonds that$$ don't mature for as long as $100$ years. In$2020,$ the U$.$S$.$ Treasury was considering issuing bonds that$$ wouldn't mature for $50$ years. A column in the Wall Street Journal noted that the prices of these bonds had been rising and that$$ "buying bonds at such stupidly high prices$$ isn't a way to keep your investment$$ safe."

What does the columnist mean by$$ "stupidly high$$ prices"?

Part $2$

A$.$

That high price bonds will inevitably be regulated by the government resulting in lower$$ long$-$term returns on the investment.

B$.$

That the higher prices indicate a weakness in the entities issuing the bonds making these bonds risky investments for the future.

C$.$

That the higher prices are pushing the interest rates on these bonds very$$ high, making them a poor security to buy and hold.

D$.$

That the higher prices make it more likely that the price will fall in the future rather than$$ rise, making them a poor security to hold until maturity.

Part $3$

What does the bonds selling for high prices have to do with the safety of the bonds as an$$ investment?

Rising bond prices are the result of

$$

$$

interest rates. If interest rates were to switch directions in the future investors holding these$$ long$-$term bonds would

$$

$$

$.$

This type of risk is called

$$

$$

$.$

Part $4$

Why might investors have considered such very$$ long$-$term government bonds to be safe$$ investments?

Part $5$

A$.$

They believe these government bonds have very low default risk.

B$.$

They believe inflation rates around the world will remain extremely low for a long period of time.

C$.$

They believe interest rates around the world will remain extremely low for a long period of time.

D$.$

All of the above are true.