Which One of the Following Would Be Considered a Risk-Free

question 54

Multiple Choice

Which one of the following would be considered a risk-free asset in real terms as opposed to nominal?

• A) Money market fund
• B) U.S. T-bill
• C) Short term corporate bonds
• D) U.S. T-bill whose return was indexed to inflation

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Definitions:

Consumption Bundle

A combination of different goods and services that an individual or a household consumes over a certain period.

Income On Food

The portion of an individual's or household's income that is spent on food and food-related expenses.

Shelter

A structure that provides cover or protection from weather, danger, or discomfort, often used as a term for housing or living spaces.

Budget Line

A graphical representation of all possible combinations of two goods that an individual can purchase with a given income, considering the prices of the goods.