U.S. Treasury securities are considered to carry no risk spread because:
A) they are the closest thing to default-risk free that an investor can obtain.
B) the prices of U.S. Treasury bonds never change.
C) the yields on U.S. Treasury bonds never change.
D) the yields on U.S. Treasury bonds are always low.

Question

Quizplus · Accepted Answer

U.S. Treasury securities are issued by the federal government and are considered to be the closest thing to default-risk free that an investor can obtain. This means that there is virtually no risk of default, and as such, the securities carry no risk spread. The other options are incorrect as the prices and yields of U.S. Treasury securities do change, and the yields can be low or high depending on various factors.

US Treasury Securities Are Considered to Carry No Risk Spread