Money Market Security Values Are Less Sensitive to Interest Rate

question 7

True/False

Money market security values are less sensitive to interest rate movements than bonds.

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Definitions:

Put Option

A monetary contract enabling the holder the choice, though not the requirement, to sell an established amount of a base asset at a predetermined rate within a set timeframe.

Hedge

An investment made to reduce the risk of adverse price movements in a security, often by taking an offsetting position in a related security.

Market Price

The current cost at which you can buy or sell an asset or service.

Bushels

A bushel is a unit of volume that is used in the United States for measuring quantities of agricultural produce, such as grains or fruits.