Risk associated with risk free us government bonds

Reference no: EM131338824

1. If the returns from a security were known with certainty, what shape would the probability distribution of returns graph have?

2. What is the nature of the risk associated with "risk-free" U.S. government bonds?

3. If inflation expectations increase, what would you expect to happen to the returns required by investors in bonds? What would happen to bond prices?

Reference no: EM131338824

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