Which of the Following Statements About Investment of Idle Cash

question 19

Multiple Choice

Which of the following statements about investment of idle cash balances in longer-term (but not long-term) fixed-period investments is false?

• A)Companies can usually obtain a higher interest rate on longer term investments.
• B)Higher transaction costs of continual reinvestment in short-term securities can usually be avoided.
• C)A problem with such a cash management policy is the possibility of an unforeseen cash shortage.
• D)Longer term fixed-interest securities are not considered as alternative investments to holding cash.

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Definitions:

Service Quality Standards

Benchmarks established to ensure services meet customer expectations and requirements, fostering customer satisfaction and loyalty.

Delivery Gap

A discrepancy between a company's service delivery standards and the actual service delivered, often leading to customer dissatisfaction.

Positive Word of Mouth

The spread of favorable information and recommendations about a product, service, or brand through conversations among consumers.

Empowerment Gap

The difference between what customers expect in terms of control and influence over a service, and what they perceive they actually receive.