Explore BrainMass
Share

T-Bonds

This content was STOLEN from BrainMass.com - View the original, and get the already-completed solution here!

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?

© BrainMass Inc. brainmass.com December 20, 2018, 4:53 am ad1c9bdddf
https://brainmass.com/business/convertible-bonds/306210

Solution Preview

If you own $1M worth of 30-year Treasury bonds, it is definitely not riskless. There must be a liquidity premium associated with this. This is because you cannot realize the face value ...

Solution Summary

The solution goes into a great amount of detail regarding the question being asked. Step by step explanation is provided for each part of the question which makes it very easy to follow along for anyone with just a basic understanding of the concepts. Overall, an excellent response to the question being asked.

$2.19