Treasury Bonds Have Provided a Higher Historical Return Than Treasury

question 23

Multiple Choice

Treasury bonds have provided a higher historical return than Treasury bills,which can be attributed to their:

• A) greater default risk.
• B) higher level of specific risk.
• C) greater exposure to interest rate risk.
• D) illiquidity.

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Definitions:

Social Welfare

Organized public or private social services for the assistance of disadvantaged groups.

Internalizing External Costs

The process of ensuring that the prices of goods and services fully reflect all the costs and benefits, including those impacts on the environment and human health that are not accounted for in the market price.

Environmental Degradation

The deterioration of the environment through depletion of resources such as air, water, and soil; the destruction of ecosystems; and the extinction of wildlife.

Market Price

The current value at which a commodity, security, or service can be bought or sold in a marketplace.