A firm's excess cash balance during a particular month could be best deployed if it were

Question

Quizplus · Accepted Answer

Investing in short term investments such as money market funds or Treasury bills can provide the firm with liquidity and relatively low-risk returns while still allowing the cash to be easily accessible if needed for operational expenses. Long term investments may result in loss of liquidity and value, and may not be appropriate for excess cash balances. Financing the excess cash with investments is not necessary as the cash is already available.

A Firm's Excess Cash Balance During a Particular Month Could