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

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When the yield curve is upward sloping, it indicates that long-term interest rates are higher than short-term interest rates. Therefore, holding short-term securities would minimize interest rate risk because they will mature and be reinvested at higher rates as interest rates rise. Holding long-term securities would expose the firm to interest rate risk as the value of these securities would decline as interest rates rise. Holding U.S. Treasury securities may minimize credit risk, but it does not necessarily minimize interest rate risk. Balancing between long- and short-term securities may be suitable in a flat yield curve environment but not in an upward sloping yield curve environment.

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