Why may investors buy a Treasury bill with a negative real interest rate?
A) fear of rising inflation
B) concern about high yields on other bonds
C) fear of default by the U.S. government
D) concern about the high default risk of alternative investments

Question

Quizplus · Accepted Answer

Investors may accept a negative real interest rate on Treasury bills due to the high default risk of alternative investments, valuing the safety and security of U.S. government-backed securities over potentially higher but riskier returns elsewhere.

Why May Investors Buy a Treasury Bill with a Negative