What characterizes Extendable Securities?

Extendable securities are characterized by the feature that their maturity date may be postponed at the option of the investor. This flexibility allows the holder to extend the life of the security beyond its original maturity date, which can be advantageous in various interest rate environments. If interest rates are low, an investor might prefer to hold onto the security longer rather than reinvesting in a lower-yielding investment.

The other options, while potentially applicable to many types of securities, do not define extendable securities specifically. Fixed interest rates are common in various types of debt securities but do not uniquely characterize extendable securities. Government backing is also a feature of certain securities but not a defining characteristic of extendable ones, as many extendable securities may be issued by corporations or other entities. Lastly, the notion of being non-negotiable is not inherent to extendable securities, as many can be traded on secondary markets.