Which of the Following Statement Completions Is Correct? If the Yield

question 75

Multiple Choice

Which of the following statement completions is correct? If the yield curve is upward sloping, then a firm's marketable securities portfolio, assumed to be held for liquidity purposes, should be

• A)Weighted toward long-term securities because they pay higher rates.
• B)Weighted toward short-term securities because they pay higher rates.
• C)Weighted toward U.S.Treasury securities to avoid interest rate risk.
• D)Weighted toward short-term securities to avoid interest rate risk.
• E)Balanced between long- and short-term securities to minimize the effects of either an upward or a downward trend in interest rates.

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