Which of the following is a true statement regarding an investment in short-term debt instruments?
A) The instruments usually do not pay interest.
B) They are often made when the company has surplus cash on hand.
C) This type of investment is never traded in the securities market.
D) A chequing account is a type of short-term debt investment.

Question

Quizplus · Accepted Answer

Short-term debt instruments are often used by companies as a way to manage surplus cash efficiently. These instruments, such as treasury bills or commercial paper, provide a return on cash that might otherwise be idle, while still offering liquidity to the investor.

Which of the Following Is a True Statement Regarding an Investment