Which of the following reasons best explains why a company that experiences seasonal fluctuations in sales may purchase investments in debt or stock securities?
A) The company may have excess cash.
B) The company may generate a significant portion of its earnings from investment income.
C) The company may invest for the strategic reason of establishing a presence in a related industry.
D) The company may invest for speculative reasons to increase the value in pension funds.

Question

Quizplus · Accepted Answer

Companies with seasonal fluctuations in sales may have excess cash during certain times of the year and may choose to invest in securities to earn a return on their extra funds.

Which of the Following Reasons Best Explains Why a Company