Excess cash may be invested in short‑term money market securities such as
1) commercial paper
2) corporate stock
3) Treasury bills

Question

​Excess cash may be invested in short‑term money market securities such as
1) commercial paper
2) corporate stock
3) Treasury bills

Quizplus · Accepted Answer

Excess cash is generally invested in short-term money market securities that are highly liquid and have low default risk. Commercial paper and Treasury bills are two such securities that fit this criteria. Corporate stock, on the other hand, is not a short-term money market security and is subject to higher risk and volatility. Therefore, the best choice(s) for investing excess cash are commercial paper and Treasury bills, as they offer low risk and high liquidity.

​Excess Cash May Be Invested in Short‑term Money Market Securities

Excess Cash May Be Invested in Short‑term Money Market Securities