Which of the Following Security Portfolios Should Offer the Highest

question 54

Multiple Choice

Which of the following security portfolios should offer the highest maturity premium?

• A)common stocks, because they never mature
• B)long-term treasury bonds, because of potential fluctuations in interest rates
• C)treasury bills, because of fluctuations in inflation rates
• D)The Dow, because it is the oldest and most stable index

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Definitions:

IFRS 9

Financial Instruments, a segment of the International Financial Reporting Standards that addresses the accounting for financial instruments, providing guidance on classification, measurement, impairment, and hedging.

Unrealized Gains And Losses

Increases or decreases in the value of investments or other assets that are not yet sold, thus not officially recorded as income or loss.

Equity Investments

Investments in shares of other companies that grant the holder ownership interests or stakes in the entities.

ASPE

Accounting Standards for Private Enterprises; a set of accounting practices and principles for private companies in Canada.