Jasmine started a small business two years ago.The business is just now seeing some success,and Jasmine notes that she has a few thousand dollars more in her bank account than she currently needs to pay her bills.However,because of the uncertainty of cash flows in her new business,she is concerned that she may need access to these funds on fairly short notice in the future.Given this situation,what should Jasmine do?
A)put some of her excess cash into money market mutual funds
B)use her excess cash to buy intangible assets
C)invest the funds in common stocks
D)keep all of these funds in her chequing account

Question

Quizplus · Accepted Answer

Jasmine should put some of her excess cash into money market mutual funds, which are low-risk investments that offer higher returns than a regular savings account. This will allow her to earn some interest while still having access to her funds in the short term. Buying intangible assets or investing in common stocks can be risky and may not be suitable for someone who needs access to their funds on short notice. Keeping all of her funds in her chequing account is also not a good option as it does not earn any interest.

Jasmine Started a Small Business Two Years Ago