Which of the Following Statement Completions Is CORRECT? If the Yield

question 15

Multiple Choice

Which of the following statement completions is CORRECT? If the yield curve is upward sloping, then the marketable securities held in a firm's portfolio, assumed to be held for emergencies, should

• A) consist mainly of short-term securities because they pay higher rates.
• B) consist mainly of U.S.Treasury securities to minimize interest rate risk.
• C) consist mainly of short-term securities to minimize interest rate risk.
• D) be balanced between long- and short-term securities to minimize the adverse effects of either an upward or a downward trend in interest rates.
• E) consist mainly of long-term securities because they pay higher rates.

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Definitions:

Functional Strategy

A specific, action-oriented plan or set of actions designed to achieve a set objective within a function of an organization, such as marketing, finance, or production.

Business Strategy

A plan crafted by businesses to achieve specific goals and objectives, outlining the methods and steps to compete in the market.

Divisional Strategy

An approach where an organization is structured into semi-autonomous units or divisions, each focusing on a specific product line, market segment, or geographical area.

Corporate Strategy

The overall plan and direction of a company, involving the integration of operational strategies to achieve long-term objectives.