The Primary Drawback of T-Bills Is

question 17

Multiple Choice

The primary drawback of T-bills is:

• A)the transaction costs involved in investing in T-bills.
• B)the inability to buy them in large denominations.
• C)that they require investors to convert their investments to other T-bills on maturity.
• D)that they offer interest rates that are lower than most other investments.

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Definitions:

Capital and Financial Account

A component of a nation's balance of payments that covers the transfer of capital and financial assets across international borders.

Balance Surplus

An economic situation where the income or supply exceeds the expenditure or demand, leading to a surplus.

Balance Deficit

The economic condition where total expenditures exceed total revenues in a given period, often in reference to national budgets or trade balances.

Current Account Deficit

Occurs when a country's total imports of goods, services, and transfers are greater than its total exports, indicating that it is spending more on foreign trade than it is earning.