The rate of return on ________ is known at the beginning of the holding period, while the rate of return on ________ is not known until the end of the holding period.
A) risky assets; Treasury bills
B) Treasury bills; risky assets
C) excess returns; risky assets
D) index assets; bonds

Question

Quizplus · Accepted Answer

Treasury bills are considered risk-free and have a fixed rate of return, which is known at the beginning of the holding period. On the other hand, risky assets have variable rates of return that are not known until the end of the holding period.

The Rate of Return on ________ Is Known at the Beginning