Question
What are three important features of Treasury notes and bonds?
Multiple select question.
Highly liquid
Default-free
Tax-free
Taxable
Multiple select question.
Highly liquid
Default-free
Tax-free
Taxable
Answers
GPT-4o mini
The three important features of Treasury notes and bonds are:
1. **Highly liquid** - Treasury notes and bonds are known for their high liquidity, meaning they can be easily bought and sold in the market without significant price changes.
2. **Default-free** - Treasury securities are backed by the full faith and credit of the U.S. government, making them virtually free of default risk.
3. **Taxable** - Interest income earned from Treasury notes and bonds is subject to federal income tax, but it is exempt from state and local taxes.
So, the correct selections would be:
- Highly liquid
- Default-free
- Taxable
1. **Highly liquid** - Treasury notes and bonds are known for their high liquidity, meaning they can be easily bought and sold in the market without significant price changes.
2. **Default-free** - Treasury securities are backed by the full faith and credit of the U.S. government, making them virtually free of default risk.
3. **Taxable** - Interest income earned from Treasury notes and bonds is subject to federal income tax, but it is exempt from state and local taxes.
So, the correct selections would be:
- Highly liquid
- Default-free
- Taxable