Which of the Following Reasons Best Explains Why a Company

question 84

Multiple Choice

Which of the following reasons best explains why a company that experiences seasonal fluctuations in sales may purchase investments in debt or share securities?

• A) The company may have excess cash.
• B) The company may generate a significant portion of its earnings from investment income.
• C) The company may invest for the strategic reason of establishing a presence in a related industry.
• D) The company may invest for speculative reasons to increase the value in pension funds.

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Definitions:

Hereditary Characteristics

Traits and features that are passed from parents to offspring through genes.

Negatively Charged Particle

An elementary particle with a negative electric charge, such as an electron.

Nucleus

The central and most important part of an atom, containing protons and neutrons, or a membrane-bound organelle found in eukaryotic cells containing genetic material.

Atom

The smallest unit of a chemical element that retains the properties of that element, consisting of a nucleus surrounded by electrons.