I have been looking into ways to invest some money and these are some questions that I came up with from the internet can anyone help me answer these so that I can make the correct decisions.
Suppose you owned a portfolio consisting of $250,000 worth of long-term U.S. government
bonds.
a. Would your portfolio be riskless?
b. Now suppose you hold a portfolio consisting of $250,000 worth of 30-day Treasury bills.
Every 30 days your bills mature, and you reinvest the principal ($250,000) in a new batch
of bills. Assume that you live on the investment income from your portfolio and that you
want to maintain a constant standard of living. Is your portfolio truly riskless?
c. Can you think of any asset that would be completely riskless? Could someone develop such
an asset? Explain.
2007-09-06
08:03:14
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10 answers
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asked by
marianne d
2