Which of the following short-term securities would you expect to offer the highest before-tax return: Treasury bills, certificates of deposit, short-term tax exempts, or commercial paper? Why?
Which of the following short-term securities would you expect to offer the highest before-tax return: Treasury bills, certificates of deposit, short-term tax exempts, or commercial paper? Why?
Commercial paper will offer highest before-tax return as its return is taxable and it carried risk of default as well. Treasury bills and certificates of deposit are considered to free of default risk whereas short-term tax exempts are free from federal taxation
