Short-term investments are securities held by a company that are

Question

Quizplus · Accepted Answer

Short-term investments are securities that a company plans to hold for a short period of time and that are readily marketable. They are also intended to be converted into cash within the next year or operating cycle, whichever is longer. This classification allows investors and analysts to better understand a company's liquidity and operating cycle. Choice A is not specific enough as not all marketable securities are short-term investments. Choice B is almost correct, but fails to include the operating cycle as a possible timeframe. Choice D is incorrect because short-term investments are not intended to be held until maturity.

Short-Term Investments Are Securities Held by a Company That Are