Question

The monthly returns on US Treasury bills over the past 50 years have:

Multiple Choice

• sometimes been less than the monthly rate of inflation.

• provided consistently positive monthly rates of return for investors.

• always been positive on a real basis.

• exceeded inflation for all periods.

• ranged between zero and five percent on an annualized basis.

Answer 1

The monthly returns on US Treasury bills over the past 50 years have: ranged between zero and five percent on an annualized basis. Reason: The monthly returns on US TB over the past 50 years has been found to have ranged between 0 - 5% on an annualized basis. It has sometimes been positive and sometimes been negative in real terms (when inflation is considered).