Although Treasury bills have no risk of default or illiquidity, they do suffer from "maturity risk" - the risk that interest rates will change in the future and thereby impact longer maturities more than shorter maturities.

Question

Quizplus · Accepted Answer

This statement is true. The value of a Treasury bill will decrease if interest rates rise, and the longer the maturity of the bill, the more sensitive it will be to changes in interest rates. Therefore, there is a certain level of "maturity risk" associated with Treasury bills.

Although Treasury Bills Have No Risk of Default or Illiquidity