Asked by Michelle Kuruc on Jul 18, 2024
Verified
Money market securities generally have the following characteristics: short ________, low ___________, and high _____________.
A) Maturities; default risk; marketability.
B) Maturities; marketability; default risk.
C) Marketability; maturities; default risk.
D) Marketability; default risk; maturities.
E) Default risk; marketability; maturities.
Maturities
The dates when the principal amount of a debt or investment is due to be paid back or reaches its expiration.
Default Risk
Default risk is the likelihood that a borrower will be unable to make principal and interest payments on a debt, potentially leading to financial loss for the lender.
Marketability
The ease with which an asset or security can be sold or bought in the market without affecting its price.
- Identify the expenses related to maintaining either insufficient or excessive amounts of cash, and understand the function of money market instruments in managing liquidity.
Verified Answer
IR
Isabel RodriguezJul 20, 2024
Final Answer :
A
Explanation :
Money market securities are known for their short maturities, low default risk, and high marketability, making them highly liquid and relatively safe investments.
Learning Objectives
- Identify the expenses related to maintaining either insufficient or excessive amounts of cash, and understand the function of money market instruments in managing liquidity.