Which of the following is generally used as a proxy for the risk-free rate of return?
A)savings account
B)certificate of deposit
C)Treasury bill
D)Treasury bond

Question

Quizplus · Accepted Answer

Treasury bills are generally considered a proxy for the risk-free rate of return because they are issued by the government and are assumed to have virtually no risk of default. Savings accounts and certificates of deposit may offer low risk, but the interest rates may not reflect the true risk-free rate. Treasury bonds are considered a low-risk investment, but they have longer maturities and thus are subject to more interest rate risk.

Which of the Following Is Generally Used as a Proxy