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.
Correct Answer:
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