Which of the Following Portfolios Have the Least Risk

question 43

Multiple Choice

Which of the following portfolios have the least risk?

• A) A portfolio of Treasury bills
• B) A portfolio of long-term United States Government bonds
• C) Portfolio of U.S. common stocks of small firms
• D) None of the above

Understand and calculate the impact of interest rates on the present and future values.

Differentiate between various types of interest (e.g., simple, compound) and their implications.

Assess the effects of changes in interest rates on savings, investments, and loan costs.

Understand the role of interest rates in the equilibrium of financial markets.

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Definitions:

Demand Curve

Illustrates the relationship between the price of a good and the quantity of that good consumers are willing and able to purchase at each price level.

Total Costs

The combined total of fixed and variable costs involved in the manufacturing of goods or services.

Daily Profit

The financial gain a business makes in a single day, calculated by subtracting total expenses from total revenue for that day.

Marginal Costs

The advance in complete cost due to the manufacturing of one additional unit of a good or service.