The return on a _____ is an appropriate measure of the risk-free rate of return.
A) long-term Treasury note
B) certificate of deposit (CD)
C) 90-day Treasury bill (T-bill)
D) long-term corporate bond
E) common stock

Question

Quizplus · Accepted Answer

The 90-day Treasury bill (T-bill) is considered the most risk-free investment in the market as it is backed by the US Government. The return on a T-bill is a good measure of the risk-free rate of return as it represents the minimum return that investors could expect on an investment with no risk.

The Return on a _____ Is an Appropriate Measure of the Risk-Free