The Problem in Stretching Out the Maturity of Marketable Securities

question 79

Multiple Choice

The problem in stretching out the maturity of marketable securities is that

• A) you are legally locked in until the maturity date.
• B) longer-term securities always make less interest than shorter-term securities.
• C) there is a greater possibility that the value of the security will drop because of the interest fluctuations.
• D) interest rates are generally lower overtime.

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Definitions:

Subsidy

A financial contribution provided by the government or another body to support an industry, business, or individual.

Earned Income Tax Credit

A refundable tax credit for low- to moderate-income working individuals and families, aimed at reducing poverty and encouraging work.

Working Poor

Individuals who are employed but still live below the poverty line due to low wages and inadequate employment benefits.

Minimum-wage Laws

Legislation that sets the lowest hourly rate of pay that an employer can legally pay their workers, intended to protect workers from unduly low pay.