Asked by mikey sanchez on Jun 04, 2024
Verified
Long bonds have higher average yields than Treasury bills.
Treasury Bills
Short-term government securities with maturity periods typically less than one year, considered low-risk investments.
Long Bonds
Bonds with maturities typically longer than 10 years, often used to lock in interest rates.
- Understand the relationship between bond yields and their maturities.
Verified Answer
TL
Terry LewisJun 10, 2024
Final Answer :
True
Explanation :
Long bonds typically offer higher average yields than Treasury bills because they carry greater risks, such as interest rate risk and inflation risk, over a longer period, and investors demand higher compensation for these risks.
Learning Objectives
- Understand the relationship between bond yields and their maturities.