The Primary Reason(s) That Firms Do Not Hold Long-Term U

question 64

Multiple Choice

The primary reason(s) that firms do not hold long-term U.S. Treasury securities in their marketable securities portfolio is because ______.

• A) the interest-rate risk associated with these securities is too high
• B) the transactions costs associated with these securities is too high
• C) the default risk associated with these securities is too high
• D) these securities are not readily marketable

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Definitions:

Hyperbola

A type of smooth curve lying in a plane, defined as the locus of all points that satisfy the equation of the difference of distances from two fixed points (the foci) being constant.

Graph

A visual representation of data or mathematical functions, often plotted on coordinate axes.

Semielliptical Arch

An arch that forms the shape of a half ellipse, commonly used in architecture for its aesthetic appeal and stability.

Diameter

The diameter of a circle is the longest straight line that can be drawn through the center, connecting two points on the circumference.