Which of the following assets has the lowest information costs?
A)A U.S. Treasury bond
B)A bond issued by the city of Smallplace, South Dakota
C)A bond issued by General Motors
D)A share of stock issued by General Motors

Question

Quizplus · Accepted Answer

U.S. Treasury bonds are considered the safest investment and have the lowest default risk. This means that their information costs are minimal compared to other assets such as corporate bonds or stocks. The U.S. government is considered to be highly transparent, and information about its bonds is easily available to investors, making them the lowest information cost asset.

Which of the Following Assets Has the Lowest Information Costs