Why, in General, Do Investment Opportunities Offer a Rate Greater

question 101

Multiple Choice

Why, in general, do investment opportunities offer a rate greater than that offered by U.S. Treasury securities for the same horizon?

• A) Most investment opportunities bear far greater risk than those offered by U.S. Treasury securities.
• B) The return from U.S. Treasury securities generally attracts less tax than the returns from other investments.
• C) The opportunity cost of capital for a given horizon is generally based on U.S. Treasury securities with that same horizon.
• D) U.S. Treasury securities are generally considered to be the best alternative to most investments.

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