Although Treasury securities 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

Treasury securities, like all fixed income securities, are subject to interest rate risk. This means that if interest rates rise, the value of existing fixed income securities will decrease. Therefore, the longer the maturity of a Treasury security, the greater the degree of interest rate risk.

Although Treasury Securities Have No Risk of Default or Illiquidity