Which of the following statements about U.S. Treasury bonds are true?
I. They are backed by the "full faith and credit" of the U.S. government.
II. They are all indexed and adjusted for inflation.
III. They trade in a very thin market.
IV. They are traded in both U.S. and foreign markets.
A) I, II and IV only
B) I, III and IV only
C) II and III only
D) I and IV only

Question

Quizplus · Accepted Answer

U.S. Treasury bonds are backed by the "full faith and credit" of the U.S. government (I) and are traded in both U.S. and foreign markets (IV). However, they are not all indexed and adjusted for inflation (II), and while they may not be as actively traded as certain other securities, the market for U.S. Treasuries is generally considered quite strong and liquid, rather than thin (III).

Which of the Following Statements About U