Compared to Treasury bills, commercial paper
A) has no default risk.
B) does not have much of a secondary market.
C) has a lower yield.
D) sells at a higher price for.
B
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If the autarky price of S were lower in country A than in country B, then if trade were allowed
A) A would likely export S to B. B) A would likely import S from B. C) neither country would want to trade. D) None of the above.
Farmers who purchase insurance against crop failures tend to be pooled with farmers far away. Why might this be the case?
A) The weather in a single geographic area represents idiosyncratic risk, which is diversifiable. B) The weather in a single geographic area represents systematic risk, which is not diversifiable. C) The weather in far-flung geographic areas represents systematic risk, which is not diversifiable. D) The weather in far-flung geographic areas are commonly positively correlated.