Securities That Can Be Easily Converted into Cash on Short

question 49

Multiple Choice

Securities that can be easily converted into cash on short notice at a price that is close to the original cost generally have a:

• A)low liquidity premium.
• B)high maturity risk premium.
• C)high inflation premium.
• D)low budget risk premium.
• E)high real risk premium.

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Definitions:

Total Breach

A complete failure to perform or fulfill contractual obligations, resulting in the termination of the contract.

Implied Covenant

An obligation between parties that is not explicitly stated in a contract but is presumed to exist to facilitate the contract's purpose and ensure fairness.

Good Faith

Conducting oneself with honesty, fairness, and sincerity in dealings or transactions, without the intention to deceive or defraud.

Mortgage Loan

A loan secured by the collateral of specified real estate property, where the borrower is obliged to pay back with a predetermined set of payments.