a customer wishes to make an investment that provides minimal credit risk with monthly income. what is the best recommendation? a t-bills b t-bonds c gnma pass-through certificates d zero-coupon bonds



Answer :

T- Bills can be best recommendation for minimum credit risk investment.

What are T - Bills?

Having a maturity of one year or less, a Treasury Bill (T-Bill) is a short-term debt of the United States government backed by the Treasury Department. Generally, $1,000 bills are available for purchase from the Treasury while some of them can reach amount to $ 5 millions maximum. Interest rate on T-Bills depends upon it maturity period. Higher the maturity period, higher is the rate.

Since Treasury Bills (T-bills) represent and are backed by the good faith of the United States government, it is believed that they have no default risk. They are offered for sale at a weekly auction with competitive bidding at a discount from par.

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