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) certificates of deposit.
D) Treasury bills of the U.S. government.

Question

Quizplus · Accepted Answer

Long-term corporate bonds typically offer higher returns than other low-risk investments, such as Treasury bills or certificates of deposit. However, they also present a greater risk of default, so a firm seeking to minimize risk when investing idle cash would be least likely to buy them. Commercial paper and Treasury bills are short-term, low-risk investments, while certificates of deposit are time deposits offered by banks with a fixed interest rate and a set maturity date.

A Firm That Wishes to Minimize Risk When Investing Idle