A Primary Purpose of Restricting the Investment of Idle Cash

question 26

Multiple Choice

A primary purpose of restricting the investment of idle cash balances to money market instruments is to:

• A) obtain government guarantees on the investment.
• B) minimize transaction costs.
• C) minimize interest-rate risk.
• D)have a continual market for selling the investments.

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Definitions:

Scatterplot

A graphical representation of data using Cartesian coordinates to display values for two variables for a set of data, revealing any correlations between them.

Scatterplot

A visual diagram that illustrates the connection between two numerical variables.

Quantitative Variables

Variables that express numerical amounts, with meaningful mathematical operations possible on their values.

Covariance

A statistical measure indicating the direction of the linear relationship between two variables; can be positive, negative, or zero.