Characteristics of Short-Term Securities Maturity -firms often limit the maturity of short-term investments to 90 days to avoid loss of principal due to changing interest rates Default risk-avoid investing in marketable securities with significant default risk Marketability -ease of converting to cash Taxability -consider different tax characteristics when making a decision7 Characteristics of Short-Term Securities n Maturity – firms often limit the maturity of short-term investments to 90 days to avoid loss of principal due to changing interest rates n Default risk – avoid investing in marketable securities with significant default risk n Marketability – ease of converting to cash n Taxability – consider different tax characteristics when making a decision