Which of the following is a common feature of U.S. Treasury securities?

U.S. Treasury securities are considered one of the safest investments available due to the full backing of the U.S. government. This means that they have no default risk, as the government has the authority to raise taxes and print currency to meet its obligations. Investors have a high level of confidence that they will receive their principal and interest payments on time, making these securities a benchmark for risk-free investment returns.

In contrast, features like high yield, variable interest rates, and income tax exemptions are not characteristic of U.S. Treasury securities. Treasury securities generally offer lower yields compared to other investments, reflecting their safety. Most Treasury securities pay fixed interest rates, although Treasury Inflation-Protected Securities (TIPS) have some variability tied to inflation. Additionally, interest earned on Treasury securities is subject to federal income tax, though it is exempt from state and local taxes. Thus, recognizing the no default risk feature provides a clear understanding of why it is a defining characteristic of U.S. Treasury securities.