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Use the following article excerpt to answer the next two questions S.& P. Downgrades Debt Rating of U. for the First Time By BINYAMIN APPELBAUM...

Use the following article excerpt to answer the next two questions 

S.& P. Downgrades Debt Rating of U.S. for the First Time 

By BINYAMIN APPELBAUM and ERIC DASH 

NYTimes.com 

Published: August 5, 2011 

WASHINGTON — Standard & Poor's removed the United States government from its list of risk-free borrowers for the first time on Friday night, a downgrade that is freighted with symbolic significance but carries few clear financial implications. 

The company, one of three major agencies that offer advice to investors in debt securities, said it was cutting its rating of long-term federal debt to AA+, one notch below the top grade of AAA. It described the decision as a judgment about the nation's leaders, writing that "the gulf between the political parties" had reduced its confidence in the government's ability to manage its finance. ... 

"The downgrade reflects our view that the effectiveness, stability, and predictability of American policymaking and political institutions have weakened at a time of ongoing fiscal and economic challenge," the company said in a statement. ... 

The downgrade could lead investors to demand higher interest rates from the federal government and other borrowers, raising costs for governments, businesses and home buyers. But many analysts say the impact could be modest, in part because the other ratings agencies, Moody's and Fitch, have decided not to downgrade the government at this time. ... 

The credit rating agencies have been trying to restore their credibility after missteps leading to the financial crisis. A Congressional panel called them "essential cogs in the wheel of financial destruction" after their wildly optimistic models led them to give top-flight reviews to complex mortgage securities that later collapsed. A downgrade of federal debt is the kind of controversial decision that critics have sometimes said the agencies are unwilling to make. 

On the other hand, S. & P. is acting in the face of evidence that investors consider Treasuries among the safest investments in the world. Yields rose before the Congressional deal on fears of default and a possible downgrade. But after a deal was struck, yields sank as money poured into Treasuries as a safe haven from sharply falling stocks and the turmoil of the European debt markets. 

On Friday, the price of Treasuries fell sharply in heavy selling, and yields rose, reversing the moves of recent sessions. The 10-year Treasury note ended the day with a yield of 2.56 percent. 

The United States has maintained the highest credit rating for decades. S. & P. first designated it AAA in 1941, reflecting a steadfast belief that the richest nation in the world would not default on its debt payments. The rating was also bolstered by the role of the dollar as the world's leading currency, ensuring that demand for American debt securities would remain strong in spite of burgeoning deficits. ... 

The federal government makes about $250 billion in interest payments a year, so even a small increase in the rates demanded by investors in United States debt could add tens of billions of dollars to those payments. ... (http://www.nytimes.com/2011/08/06/business/us-debt-downgraded...) 


11. The reference to "raising costs for government" in the excerpts of the article above is a result of:

A. the US government being delisted and its stock no longer trading on the NYSE

B. the US government being delisted and its stock no longer trading on the NASDAQ

C. investors demanding a higher yield to maturity due to the higher default risk

D. investors demanding a lower yield to maturity due to the lower default risk

E. triggering the debt covenants that lead to all debt becoming due 

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