Which of the following statement completions is CORRECT? If the yield curve is u

Question

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
Answer







consist mainly of long-term securities because they pay higher rates.








consist mainly of short-term securities because they pay higher rates.








consist mainly of U.S. Treasury securities to minimize interest rate risk.








consist mainly of short-term securities to minimize interest rate risk.








be balanced between long- and short-term securities to minimize the adverse effects of either an upward or a downward trend in interest rates.

Explanation / Answer

answer is consist mainly of short-term securities to minimize interest rate risk.

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