Ethics - EOC - US Treasury (R2.Q16)

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June06

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[Rephrase]

Can a advisor make below statement to client?
“The payment of the bonds is guaranteed by the US government; therefore, the default risk of the bonds is virtually zero.”
 
From L1/L2 experience, when there is a word, guarantee, 99% is wrong,
 
“…solely in long-term US Treasury bonds” There is kind of a guarantee that the US never fails?! I know that this assumption is so so.
 
Since the question has been removed by the admin, could you post where to find it in the CFAI material?
 
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