
Passage: The lower the credit rating of the borrower, the higher the cost of borrowing and the higher the yield of the creditor. On August 5th, 2011, S & P downgraded the sovereign credit rating of the United States from AAA to AA+. As a matter of common sense, investors should reduce their holdings of US Treasuries when they are in safe-haven demand, thus pushing prices lower and yields higher. However, on Aug. 8, the price of US Treasuries rose and the yield fell, and the yield on the latest 10-year Treasury note fell to 2.34%, the lowest so far this year.
Question: If which of the following statements is true, which of the followings can best explain the above counterintuitive phenomenon?
A. A.On the evening of August 5, the U.S. Treasury responded that S & P had a margin of error of $2 trillion in rating calculations.
B. B.Compared with the bonds of the European Union, Japan and other countries, US Treasuries are still relatively safe and liquid investments.
C. C.After the downgrade of the US sovereign credit rating, Russia began to reduce its holdings of US Treasuries, while China still increased its holdings of US Treasuries.
D. D.In order to break the monopoly of S & P and other three American rating agencies, the European Union plans to establish an European credit rating agency.
Answer: