If the investor anticipates higher interest rates,the investor should

Question

Quizplus · Accepted Answer

When interest rates are expected to rise, short-term, money market securities are the most suitable investment option. This is because these securities have a shorter maturity period and therefore are less sensitive to changes in interest rates than long-term investments such as bonds. As interest rates rise, bond prices generally decrease, resulting in losses for bondholders. Money market securities, on the other hand, provide a fixed return and are less likely to be impacted by rising interest rates. Therefore, acquiring short-term, money market securities is the best choice for an investor anticipating higher interest rates.

If the Investor Anticipates Higher Interest Rates,the Investor Should