The Primary Reason a Firm Holds Marketable Securities Is Because

question 17

Multiple Choice

The primary reason a firm holds marketable securities is because they:

• A)substitute for its long-term debt.
• B)offer a place to temporarily invest cash balances to earn high rates of return.
• C)are useful for managing credit sales.
• D)can be used to help speed up collections of its accounts payable.
• E)permit the firm to earn positive returns on cash that is not needed to pay bills in thecurrent period.

---

Definitions:

Special Revenue Fund

A fund used by a government to account for revenue from specific sources that are legally restricted to expenditure for particular purposes.