Determine whether the investment is riskless


Problem:

Suppose you own $1 million worth of 30-year Treasury bonds. Is this asset riskless?

You own $1 million worth of 90-day Treasury bills. You "roll over" this investment every 90 days by reinvesting the proceeds in another issue of 90-day Treasury bills. Is this investment riskless?

Can you think of an asset that is truly riskless?

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Finance Basics: Determine whether the investment is riskless
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