Treasury Securities

If we get a question on the exam, essentially asking if treasury securities are “riskless,” how should we answer this? I know that they are considered to have ZERO credit risk and default risk, but should they be called riskless? What about interest rate risk? I have seem the textbooks call them riskless, like I am reading on page 227 in the Secret Sauce, as well as examples saying that there is still some risk

I wouldn’t worry too much about this type of question. However, when the term riskless is used, it’s reffering to the credit worthiness of the backing institution. That’s why riskless is used when referring to treasuries (Gov).

“risk-free” = “riskless”?

I write down here what is written in page 227 in secrect sauce

" Federal Agency Securities: Agency bonds are debt securities issued by various agencies and org of the US govt. Most agency issues are not obligations of US treasury and technically not to be considered to be riskless like treasury securities. However, they are very high quality securities tht have almost no risk of default "

What i get is; Treasury securities (T bills, nots & bonds) are different from Federal Agency securities. T securities are riskless but FAS are not but they are high quality securities.

i read a question in ethics where an analyst was telling his client that treasury securities are riskless and that was a case of misrepresntation because the treasuries have zero default risk but are still susceptible to interest rate risks and liquidity risk (only off the run securities … the risk is smaller in comparision but nevertheless still exists).

This was the justification that schweser gave