The risk-free rate is usually approximated by interest rates on U.S.government debt,because:
A)the U.S.government is considered extremely unlikely to default.
B)the U.S.government sets all policy concerning interest rates.
C)the U.S.government backs all loans secured with that rate.
D)None of these is true.

Question

Quizplus · Accepted Answer

The U.S. government is considered to have an extremely low risk of defaulting on its debt, making it a safe and reliable risk-free rate.

The Risk-Free Rate Is Usually Approximated by Interest Rates on U.S.government