Financial security with low degree risk and investment held by businesses is classified as________________?
Correct answer: D. Money market mutual funds
- A. Treasury bills
- B. Commercial paper
- C. Negotiable certificate of deposit
- D. Money market mutual funds
Explanation
Money market mutual funds invest in short-term, high-quality instruments and therefore generally carry relatively low risk for business investors. Treasury bills and commercial paper are also low-risk instruments, but the wording points to the investment fund classification.
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Business finance explains how organisations plan, obtain and use money while balancing risk, return and liquidity. Topics include financial statements, time value of money, budgeting, working capital, capital structure, sources of finance, investment appraisal and cost of capital. Capital budgeting evaluates long-term projects, whereas working capital manages day-to-day operations.
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