Money Market Securities Have Which of the Following Characteristics

question 83

Multiple Choice

Money market securities have which of the following characteristics?
I.long maturities
II.low default risk
III.high degree of liquidity
IV.low rates of return

• A)I and III only
• B)II and III only
• C)I and IV only
• D)II, III, and IV only
• E)I, II, III, and IV

---

Definitions:

Profitability Index

A calculation used to assess the relative profitability of an investment, computed as the present value of future cash flows divided by the initial investment cost.

Present Value

The current value of a future sum of money or stream of cash flows, discounted at a specific interest rate.

Annuity

A financial product that pays out a fixed stream of payments to an individual, typically used as an income stream for retirees.

Interest Rate

The percentage charged by a lender to a borrower for the use of assets, typically expressed as an annual percentage of the principal.