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

question 14

Multiple Choice

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

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

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Definitions:

Federal Reserve Board

Governs the Federal Reserve System, the central banking system of the United States, and oversees the nation's money supply and banking industry.

Money Laundering

The illegal process of making large amounts of money generated by a criminal activity, such as drug trafficking or terrorist funding, appear to be earned legally.