If a firm has excess cash that will be needed for a required payment after six months, these funds should not be invested in
A) commercial paper
B) bankers' acceptances
C) corporate bonds
D) tax anticipation notes

Question

​If a firm has excess cash that will be needed for a required payment after six months, these funds should not be invested in
A) ​commercial paper
B) ​bankers' acceptances
C) ​corporate bonds
D) ​tax anticipation notes

Quizplus · Accepted Answer

Corporate bonds typically have longer maturities and may not provide the liquidity needed for a payment due in six months, making them less suitable for short-term investment of excess cash compared to the other options listed.

​If a Firm Has Excess Cash That Will Be Needed

If a Firm Has Excess Cash That Will Be Needed