Asked by Ellen Sypolt on Jul 21, 2024
Verified
Excess cash can be invested in marketable securities which earn a modest return but are almost as liquid as cash itself.
Excess Cash
Funds that exceed the normal operating needs of a company, which might be used for investments, acquisitions, or improving financial ratios.
Marketable Securities
Financial instruments that can easily be converted to cash due to their high demand and short maturity period.
- Acquire knowledge about the properties and role of marketable securities in corporate financial management.
Verified Answer
ZA
Zachary AndersonJul 25, 2024
Final Answer :
True
Explanation :
Marketable securities are investment instruments such as stocks, bonds, or mutual funds that can be easily sold or traded for cash. They offer more earning potential than keeping excess cash idle, while still being relatively liquid compared to other long-term investments.
Learning Objectives
- Acquire knowledge about the properties and role of marketable securities in corporate financial management.