The correct option is that both Statement-I and Statement-II are correct, and Statement-II explains Statement-I. The reason for this is that US Treasury Bonds are essentially a promise to pay, relying on the credibility and fiscal stability of the US government rather than tangible assets. If the US were to default on its debt, it would undermine investor confidence, as these bonds are not secured by hard assets, highlighting that their value is fundamentally tied to the government's ability to honor its financial obligations. This illustrates the concept of sovereign debt and the importance of government credibility in maintaining economic stability, a crucial consideration for understanding financial systems and economic policy, topics often emphasized in UPSC syllabus materials.