- CFA Exams
- CFA Level I Exam
- Topic 9. Portfolio Management
- Learning Module 1. Portfolio Risk and Return: Part I
- Subject 1. Historical Return and Risk
CFA Practice Question
From 1900 to 2008, ______
B. the standard deviation of returns from T-bills was 0.
C. T-bills suffered very little from interest rate risk.
A. T-bills never earned a negative real return in any year.
B. the standard deviation of returns from T-bills was 0.
C. T-bills suffered very little from interest rate risk.
Correct Answer: C
T-bills earned a negative return only in 1938. The standard deviation was 3.1, not 0.
User Contributed Comments 1
| User | Comment |
|---|---|
| johntan1979 | pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/histret.html Good reference to see the "risk" of investing in T bills over a long period of time. Not sure why the T bill return in 1938 is not negative as described in the answer. |