medium · Corporate Credit Analysis
A sovereign has a debt-to-GDP ratio of 80%, nominal growth (g) of 3%, and an effective interest rate (r) on its debt of 5%.
If the government maintains a 0% primary balance, what is the projected debt-to-GDP ratio for the following year?
- 81.55%
- 80.00%
- 82.00%
- 78.45%
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