Suppose you owned a portfolio consisting of $250,000 of long term U S government bonds a Would your portfolio be riskless Explain b Now suppose the portfolio consists of $250,000 of 30 day Treasury bills Every 30 days your bills mature, and you will reinvest the principal ($250,000) in a new batch ...

a No it is not riskless The portfolio would be free of default risk and liq ...

Suppose you owned a portfolio consisting of $250,000 of long-term U.S. government bonds. a. Would your portfolio

Question:

Suppose you owned a consisting of $250,000 of long-term U.S. government bonds.
a. Would your be riskless? Explain.
b. Now suppose the consists of $250,000 of 30-day Treasury bills. Every 30 days your bills mature, and you will reinvest the principal ($250,000) in a new batch of bills. You plan to live on the investment income from your and you want to maintain a constant standard of living. Is the T-bill truly riskless? Explain.
c. What is the least risky security you can think of? Explain.

Portfolio
A portfolio is a grouping of financial assets such as stocks, bonds, commodities, currencies and cash equivalents, as well as their fund counterparts, including mutual, exchange-traded and closed funds. A portfolio can also consist of non-publicly...