The risk-free interest rate is the rate on long-term U S government bonds. True

Question

The risk-free interest rate is the rate on long-term U S government bonds. True False An investment's average expected rate of return is the probability weighted average of the investment's possible future rates of simple average of the investments possible future rates of return probability weighted average of all past rates of return. simple average of the rates of return of all similar investments The rate of return on short-term U S government bonds is often referred to as the Federal funds rate discount rate risk-free interest rate. yield rate

Explanation / Answer

FALSE
The risk free rate of return is the rate of return earned on short term government bonds.

An investment's average expected rate of return is the
probability weighted average of the investment's possible future rates of return.

The rate of return on short-term U.S. government bonds is often referred to as the risk-free interest rate.

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