Which of the following is true of a Eurodollar deposit?
A) Eurodollar deposits tend to provide yields below nearly all other marketable securities with similar maturities due to their low risk.
B) Eurodollar deposits are non-negotiable and pay interest only at maturity, hence the yield is higher than on other marketable securities with similar maturities.
C) Eurodollar deposits tend to provide yields above nearly all other marketable securities with similar maturities due to the higher risk.
D) Eurodollar deposits tend to provide higher yields above nearly all other marketable securities with similar maturities due to the absence of an active secondary market.

Question

Quizplus · Accepted Answer

Eurodollar deposits tend to offer higher yields compared to other marketable securities of similar maturities because they carry a higher risk. This is due to factors like credit risk and the lack of deposit insurance, which compensates investors with higher returns for the increased risk.

Which of the Following Is True of a Eurodollar Deposit