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Financial Planner

Category - Investment Planning

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What type of investment vehicle has low-default-risk and specializes in short-term securities?

U.S. Series EE and HH Bonds
High-grade Common Stock
High-grade Corporate Bonds
Money Market Accounts

Explanation

Answer: D - Money market accounts are investment vehicle that are low-default-risk and specializes in short-term securities. Short-term debt instruments are those having original maturities of 1 year or less. These are suitable for inclusion in a firm’s marketable securities portfolio, especially, U.S. Treasury issues, other federal agency issues, municipal securities, negotiable certificates of deposit, commercial paper, auction rate preferred stocks, money market mutual funds, and bank money market accounts.

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