When a corporation designs an investment strategy for investing temporary excess cash balances in marketable securities,it must consider a variety of factors.Which of the following is the least important?
A) liquidity
B) financial risk
C) achieving the highest yield
D) maintaining the safety of principal

Question

Quizplus · Accepted Answer

Although achieving the highest yield is an important consideration for investing excess cash balances, it is the least important factor compared to liquidity, financial risk, and maintaining the safety of principal. Liquidity is important to ensure that the corporation has access to cash when needed, financial risk needs to be managed to prevent losses and protect the corporation's financial stability, and maintaining the safety of principal is critical to avoid losing the corporation's funds. Therefore, while yield is important, it is not the least important factor a corporation should consider when designing an investment strategy for excess cash balances.

When a Corporation Designs an Investment Strategy for Investing Temporary