Which of the Following Is NOT a Typical Characteristic of Money-Market

question 3

Multiple Choice

Which of the following is NOT a typical characteristic of money-market securities?

• A) Little or no default risk
• B) Liquid, easily bought and sold
• C) Interest is not taxable at federal level
• D) Maturities less than 1 year

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Definitions:

Dividends

Payments made by a corporation to its shareholder members, distributed from the company's profits.

Beta

A measure of a stock's volatility in relation to the overall market; a beta higher than 1 indicates greater volatility.

Risk-Free Rate

The estimated profit percentage from an investment considered free of risk, typically indicated by government bonds' interest rates.

Common Stock

A type of security that represents ownership in a corporation, entitling the holder to vote at shareholder meetings and receive dividends.