Credit risk can be minimized by:

Credit risk can be minimized by:

• A. Limiting the number of investments in a portfolio that are subject to rapid market swings.
• B. Keeping maturities fairly short if interest rates are expected to rise.
• C. Investing only in U.S. Treasury securities.
• D. Employing a buy-and-hold investment strategy.

Answer: (C)

Investing only in U.S. Treasury securities is an effective strategy for minimizing credit risk due to the high credit quality and reliability of these securities. U.S. Treasury securities are backed by the full faith and credit of the United States government, which is widely regarded as one of the safest investments. This virtually eliminates the risk of default, as the government is unlikely to fail to meet its debt obligations. As a result, investors can expect a high level of security and stability when they include U.S. Treasury securities in their portfolios. In contrast, other investment options may carry varying degrees of credit risk depending on the issuer's financial health and market conditions. Therefore, focusing solely on U.S. Treasury securities provides a straightforward method for minimizing credit risk in an investment strategy.

Investing only in U.S. Treasury securities is an effective strategy for minimizing credit risk due to the high credit quality and reliability of these securities. U.S. Treasury securities are backed by the full faith and credit of the United States government, which is widely regarded as one of the safest investments. This virtually eliminates the risk of default, as the government is unlikely to fail to meet its debt obligations. As a result, investors can expect a high level of security and stability when they include U.S. Treasury securities in their portfolios.

In contrast, other investment options may carry varying degrees of credit risk depending on the issuer's financial health and market conditions. Therefore, focusing solely on U.S. Treasury securities provides a straightforward method for minimizing credit risk in an investment strategy.