describe and justify what the value of the beta of a US trea

describe and justify what the value of the beta of a U.S treasury bill should be.

Solution

Treasury bill has beta of Zero or Beta = 0.

Treasury bill doesn’t carry any risk or it is risk free investment. Beta is systematic risk measure. Systematic risk doesn’t affect return from treasury bills.

Beta tells that how many times a security can earn over market risk premium where as market risk premium is not there with treasury bills.

Hence, treasury bills has Beta = 0