Which of the following securities generates a return that is closest to a risk-free rate of return?
A)treasury bill
B)treasury bond
C)commercial paper
D)corporate bond
E)corporate stock

Question

Quizplus · Accepted Answer

Treasury bills are considered to be the closest security to a risk-free rate of return. This is because they are issued and backed by the US government, which is considered to be a very low-risk borrower. Treasury bills are also short-term securities, with maturities of one year or less, which reduces the risk of interest rate fluctuations. Therefore, the return on a treasury bill is often used as a benchmark for risk-free rates of return.

Which of the Following Securities Generates a Return That Is