Which of the Following Is the Least Desirable Business Reason

question 61

Multiple Choice

Which of the following is the least desirable business reason for a company to invest in debt or equity securities?

• A)to generate investment income
• B)to invest short-term,excess cash
• C)to pursue certain business strategies
• D)to weaken the relationship between the investing company and a key vendor.

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Definitions:

State Tax

Taxes imposed by individual states on income, property, goods, and services within their jurisdiction.

Federal Tax

The tax levied by the national government on income, sales, gifts, and other transactions.

After Tax Yield

The income return on an investment after taxes have been deducted, revealing the net gain to the investor.

Corporate Bond

A debt security issued by a corporation and sold to investors, with the promise of interest payments and the return of principal at maturity.