Which of the Following Investments Is Least Likely to Be

question 88

Multiple Choice

Which of the following investments is least likely to be allowed with most defined-contribution plans?

• A) Stock mutual funds
• B) Bond mutual funds
• C) Money market funds
• D) Individual corporate bonds

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Definitions:

Exercise Price

The price at which the holder of an option can buy (for a call option) or sell (for a put option) the underlying asset.

Standard Deviation

A measure of the dispersion or variation in a set of values, indicating how much the numbers in the set deviate from the mean (average).

Risk-free Rate

This is the theoretical rate of return of an investment with zero risk, typically represented by the yield on government securities.

Call Option

A financial agreement which permits the purchaser the option, though not the requirement, to purchase a specific asset like a stock, bond, commodity, or another type of asset at a predetermined price during a defined timeframe.