Asked by Riley Bynum on Jun 29, 2024
Verified
A portfolio of Treasury bills will have a beta equal to minus one.
Treasury Bills
Treasury bills are short-term government securities issued at a discount from the face value and mature in one year or less, representing a secure, low-risk investment option.
Portfolio
Group of assets such as stocks and bonds held by an investor.
Beta
A measure of a stock's volatility in relation to the overall market, where a beta greater than 1 indicates higher volatility and less than 1 indicates lower volatility.
- Distinguish between risk-free and risky assets.
Verified Answer
ZK
Zybrea KnightJul 04, 2024
Final Answer :
False
Explanation :
The beta of Treasury bills is generally considered to be zero, not minus one, because they are risk-free securities and do not have any correlation with the market's returns, which beta measures.
Learning Objectives
- Distinguish between risk-free and risky assets.