CFA Practice Question

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CFA Practice Question

From 1900 to 2008, ______

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

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.
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