Consider the Risk-Return Relationship in T-Bills During Each Decade Since

question 35

Multiple Choice

Consider the risk-return relationship in T-bills during each decade since 1950. Given this data, which of the following statements is correct?
$$\begin{array} { c c } \text { Decade } & \text { CoV } \\1950 \mathrm {~s} & 0.40 \\1960 \mathrm {~s} & 0.33 \\1970 \mathrm {~s} & 0.29 \\1980 \mathrm {~s} & 0.29 \\1990 \mathrm {~s} & 0.24 \\2000 \mathrm {~s} & 0.55\end{array}$$

• A) The best risk-return relationship was during the 1950s.
• B) The best risk-return relationship was during the 1990s.
• C) Since T-bills are backed by the full faith of the U.S. government, computing the risk-return relationship for them is invalid.
• D) None of these choices are correct.

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