• Statement 1 is incorrect:
• If the United States defaults on its debt, holders of its treasury bonds would be unable to claim or receive payments.
• Since US government-issued bonds are not backed by any underlying assets, a default on these bonds would result in a default.
• Statement 2 is correct:
• U.S. government debt, often referred to as Treasury bonds or Treasuries, is not backed by specific hard assets.
• Unlike corporate bonds, which may be secured by collateral such as real estate or equipment, U.S. Treasuries rely on the government’s ability to generate revenue through taxation and other means.

o  These bonds are backed by the full faith and credit of the United States government and not backed by hard assets.

•   Hence option a is correct: Both statement I and statement II are correct, and statement II is the correct explanation of statement I.