Future Business Leaders of America (FBLA) Agribusiness Practice Test

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What are treasury bills considered?

  1. Long-term high-risk investments

  2. Short-term investments

  3. Equity-based securities

  4. Real estate investments

The correct answer is: Short-term investments

Treasury bills, commonly known as T-bills, are considered short-term investments because they are issued by the federal government with maturities that typically range from a few days to one year. When investors purchase T-bills, they are lending money to the government for a limited time, making them a very secure investment option due to the backing of the U.S. government. This short duration is a key characteristic that distinguishes T-bills from other investment options, such as long-term bonds or equities. It also contributes to their relatively lower returns compared to long-term investments. Overall, T-bills provide investors with a safe place to park their money temporarily while earning a small return, which suits those looking for liquidity and stability in their investment portfolio.

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