Products & Their RisksQuestion 21 of 398
U.S. Treasury securities are generally considered to have the LOWEST of which risk?
a.Credit (default) risk
b.Interest-rate risk
c.Inflation (purchasing-power) risk
d.Reinvestment risk
Explanation
Because they are backed by the full faith and credit of the U.S. government, Treasuries carry essentially the lowest credit or default risk of any security. They still face interest-rate, inflation, and reinvestment risk like other bonds.
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