Riskless assets for treasury bonds


Problem 1: Suppose you own $1 million worth of 30-year Treasury bonds. Is this asset riskless? Why or why not?

Problem 2: You own $1 million worth of 90-Day Treasury bills ("T-bills"). You "roll over" this investment every 90 days by reinvesting the proceeds in another issue of 90-day T-bills. Is this investment riskless - why? Is it more or less risky than the investment in question A?

Problem 3: Can you name an asset that is truly riskless? An asset besides cash?

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Finance Basics: Riskless assets for treasury bonds
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