The primary difference between Canadian Treasury bills and Canadian Treasury bonds is that the bills:
A)do not have default risk.
B)have more price volatility.
C)have a shorter maturity at time of issue.
D)offer a higher return.

Question

Quizplus · Accepted Answer

Canadian Treasury bills have shorter maturities at the time of issue, typically less than one year, while Canadian Treasury bonds have longer maturities, typically ranging from 10 to 30 years. Thus, the primary difference between the two is their maturity at the time of issue. Choice A is incorrect because both Canadian Treasury bills and Treasury bonds are considered to have very low default risk. Choice B is incorrect because Treasury bills typically have less price volatility compared to Treasury bonds. Choice D is incorrect because Treasury bills typically offer lower returns compared to Treasury bonds as they have shorter maturities.

The Primary Difference Between Canadian Treasury Bills and Canadian Treasury