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AICPA CPA-Business Exam - Topic 2 Question 41 Discussion

Actual exam question for AICPA's CPA-Business exam
Question #: 41
Topic #: 2
[All CPA-Business Questions]

All of the following are alternative marketable securities suitable for investment, except:

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Suggested Answer: D

Choice 'd' is correct. Convertible bonds. Temporarily idle cash should be inverted in very liquid, low risk short-term investments only. U.S. T-bills are basically risk-free. Banker's acceptances and Eurodollars are only slightly more risky. Commercial paper, the short-term unsecured notes of the most credit-worthy large U.S. corporations is a little riskier, but still relatively low risk. However, convertible bonds are subject to default risk, liquidity risk, and maturity (interest rate) risk, and as such are inappropriate securities for short-term marketable security investment.


by Rodolfo at May 05, 2022, 02:05 AM

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Lynelle
4 months ago
Totally agree, D seems off to me too!
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Ora
4 months ago
Wait, are convertible bonds really not considered alternative?
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Denise
4 months ago
Commercial paper is super common for short-term funding.
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Ahmad
4 months ago
I think convertible bonds are the odd one out here.
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Pamella
5 months ago
Eurodollars are definitely marketable securities.
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Terry
5 months ago
I think this question is asking about the key elements of a performance standard. I'll need to carefully consider each option to determine which one best describes what a performance standard specifies.
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Serina
5 months ago
This looks like a straightforward question about the minimum configuration needed for an HR Service that will only be used internally. I think the answer is C - just the HR Service itself.
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Nickolas
5 months ago
This is a great opportunity to apply my knowledge of service design principles. I'll carefully consider each option and select the one that best matches the description.
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