Why Are US Treasury Securities an Attractive Asset for Banks

question 11

Multiple Choice

Why are US Treasury securities an attractive asset for banks?

• A)They are backed by the global banking system.
• B)They have a short term to maturity.
• C)They offer a high rate of return.
• D)They have a low default risk.

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Definitions:

Price-Earnings Ratio

A financial metric used to evaluate the valuation of a company’s shares, calculated by dividing the market price per share by the earnings per share.

Measure of Liquidity

A metric that determines how easily an asset can be converted into cash without affecting its market price.

Total Debt to Total Assets Ratio

A financial metric that compares the total liabilities of a company to its total assets to assess leverage.

Creditor's Point of View

The perspective of an individual or institution that has lent money or provided goods or services to a debtor, focusing on the recovery of their credits.