In Theory, the Return You Earn from Government Bonds (Treasury

question 32

Multiple Choice

In theory, the return you earn from government bonds (Treasury bills, or T-bills) which virtually have no default risk over a short time (one year or less) is called the:

• A)geometric average return.
• B)inflation premium.
• C)risk premium.
• D)risk-free return.
• E)arithmetic average return.

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Definitions:

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