Large firms are most likely to use money markets for the following reason:
A) To finance long term investments
B) To adjust their liquidity position.
C) To make long term investments.
D) To buy commercial paper at lower interest rates than it could sell through a bank

Question

Quizplus · Accepted Answer

Large firms typically have a lot of cash on hand, and they need to manage their liquidity position effectively. Money markets offer them a way to do this by providing short-term investment options that can be easily liquidated. Additionally, money markets often provide higher returns than traditional bank savings accounts, making them an attractive option for large firms looking to earn a return on their excess cash.

Large Firms Are Most Likely to Use Money Markets for the Following