Which of the Following Statements Are True of Treasury Bills

question 10

Multiple Choice

Which of the following statements are true of Treasury bills?

• A) The market for Treasury bills is extremely deep and liquid.
• B) Occasionally, investors find that earnings on T-bills do not compensate them for changes in purchasing power due to inflation.
• C) By volume, most Treasury bills are sold to individuals who submit noncompetitive bids.
• D) All of the above are true.
• E) Only A and B of the above are true.

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Definitions:

Preemptive Right

A shareholder's right to maintain their proportional ownership in a company by buying a proportionate share of any new stock issues.

Common Shareholders

Individuals or entities that own common shares in a company, giving them voting rights and a share in the company's profits.

Proxy Right

A right granted to an individual or group to vote on behalf of another person, usually a shareholder, in corporate decisions and elections.

Financial Leverage

The use of borrowed money (debt) to finance the purchase of assets, with the expectation that the income or capital gain from the assets will exceed the cost of borrowing.