So it is true if you hold until maturity, you eliminate interest rate risk. However, if you hold to something like 1 year instead, you are not adding a lot of interest rate risk, and you may actually be materially reducing liquidity risk.They are only the lowest-risk if you hold to maturity.
This is an illustration of how in a world of multiple forms of risk, "lowest-risk" doesn't necessarily have a neat definition. There are almost always tradeoffs, and "optimal" tradeoffs depend on the goals and general circumstances of the investor in question.
Statistics: Posted by NiceUnparticularMan — Wed Oct 01, 2025 4:26 pm — Replies 23 — Views 1888