A firm that wishes to minimize risk when investing idle cash would be least likely to buy
A) commercial paper.
B) long-term corporate bonds.
C) negotiable certificates of deposit.
D) Treasury bills of the U.S. government.

Question

Quizplus · Accepted Answer

Long-term corporate bonds are riskier than the other options listed as they have a higher chance of defaulting over a longer period of time. Therefore, a firm that wishes to minimize risk when investing idle cash would be least likely to buy long-term corporate bonds. The other options listed (commercial paper, negotiable certificates of deposit, and Treasury bills) are all considered to be safer investments with a lower risk of default.

A Firm That Wishes to Minimize Risk When Investing Idle