Which One of the Following Statements Is Correct

question 15

Multiple Choice

Which one of the following statements is correct?

• A) Two primary reasons why a company holds cash are seasonal fluctuations and short-term investments.
• B) Banks are prohibited from investing cash surpluses on behalf of their customers on a short- term basis.
• C) Short-term securities tend to have a high degree of interest rate risk.
• D) The money market refers to securities that mature in one year or less.
• E) Corporations are not permitted to invest in money market mutual funds but can invest in bank money market accounts.