Which One of the Following Statements Is Correct

question 38

Multiple Choice

Which one of the following statements is correct?

• A)The money market refers to securities that mature in two years or less.
• B)Banks are prohibited from investing cash surpluses on behalf of their customers on a short- term basis.
• C)Short-term securities tend to have a high degree of interest rate risk.
• D)A cyclical firm may purchase marketable securities as part of its short-term financing plan.
• E)Corporations are not permitted to invest in money market mutual funds but can invest in bank money market accounts.

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Definitions:

Normally Distributed

A distribution that is symmetric about the mean, showing that data near the mean are more frequent in occurrence than data far from the mean.

Confidence Interval

Values range, derived from statistical samples, that possibly includes the value of an elusive population parameter.

Population Mean

The average value of a set of characteristics within a full population, calculated by summing all the values and dividing by the number of observations.

Sample Mean

The average value of all the observations in a sample, calculated as the sum of the observations divided by the number of observations in the sample.