Which of the following statements about Treasury banknotes is untrue?a.They have a guaranteed yield and are highly liquid.b.They are distributed as promissory notes.c.They can be purchased for a minimum of 15,000 and in multiples of that sum.d.They pose a significant default risk.
Question
Which of the following statements about Treasury banknotes is untrue?a.They have a guaranteed yield and are highly liquid.b.They are distributed as promissory notes.c.They can be purchased for a minimum of 15,000 and in multiples of that sum.d.They pose a significant default risk.
Solution
The statement "They pose a significant default risk" is untrue. Treasury banknotes, like other government securities, are considered to have virtually no risk of default. This is because they are backed by the full faith and credit of the government that issues them.
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