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

Multiple Choice

Which of the following statement completions is correct? If the yield curve is upward sloping, then a firm's marketable securities portfolio, assumed to be held for liquidity purposes, should be

A) Weighted toward long-term securities because they pay higher rates.
B) Weighted toward short-term securities because they pay higher rates.
C) Weighted toward U.S.Treasury securities to avoid interest rate risk.
D) Weighted toward short-term securities to avoid interest rate risk.
E) Balanced between long- and short-term securities to minimize the effects of either an upward or a downward trend in interest rates.