Reading 46: Working Capital Management - LOS d ～ Q1-2 black, excess, security, investing, class

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1.The least appropriate security for investing short-term excess cash balances would be:

A)   bank certificates of deposit.

B)   preferred stock.

C)   time deposits.

D)   a money market mutual fund.

2.An appropriate cash management strategy for a company that has a seasonally high need for cash prior to the holiday shopping season would least likely include:

A)   borrowing funds though a bank line of credit.

B)   investing in U.S. Treasury notes at other times of the year because they are highly liquid.

C)   allowing short-term securities to mature without reinvestment.

D)   issuing commercial paper to meet seasonal cash needs.

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