The Risk-Free Myth

April 21, 2011

The finance professors at New York University’s Graduate School of Business Administration all had experience on Wall Street, just steps away from our classrooms, when I earned my M.B.A. there in the mid-1980s. They taught me that the yield on U.S. Treasury bills represented a “risk-free” rate of return. A T-bill’s short term to maturity immunized it from serious loss of value if interest rates happened to rise, they said, …

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Recognizing America’s Less-Than-Perfect Credit

July 23, 2010

The U.S. Treasury is not yet a subprime borrower, but it is no longer a top-tier credit risk, either. It took a Chinese company to finally come out and say so. Dagong International Credit Rating Co. made headlines this month when it gave the United States a lower credit rating than it assigned to up-and-coming China. That, however, is beside the point. Dagong, which says it wants to break the …

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