- CFA Exams
- CFA Level I Exam
- Study Session 18. Portfolio Management (1)
- Reading 53. Portfolio Risk and Return: Part II
- Subject 1. Capital Market Theory
CFA Practice Question
An example of risk-free lending is ______.
A. purchasing T-bills
B. getting a margin loan from a stock broker
C. keeping currency in a wall safe
Explanation: Purchasing T-bills is effectively lending the U.S. government money, which is riskless due to the ability of the government to always pay off its loans (at least nominally).
User Contributed Comments 2
| User | Comment |
|---|---|
| sagrr | selling? not purchasing. |
| dipu617 | Its purchasing. When we purchase T-bills, we lend moeny to the issuer. :-) |