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AICPA CPA-Business Exam - Topic 3 Question 31 Discussion

All of the following are valid reasons for a business to hold cash and marketable securities, except to:
D) Earn maximum returns on investment assets.
A) Satisfy compensating balance requirements.
B) Maintain adequate cash needed for transactions.
C) Maintain a precautionary balance.

AICPA CPA-Business Exam - Topic 3 Question 31 Discussion

Actual exam question for AICPA's CPA-Business exam
Question #: 31
Topic #: 3
[All CPA-Business Questions]

All of the following are valid reasons for a business to hold cash and marketable securities, except to:

Show Suggested Answer Hide Answer
Suggested Answer: D

Choice 'd' is correct. There are three primary motives for holding cash:

1. Transactions demand

2. Precautionary demand

3. Speculative demand

However, cash is generally held in very short-term liquid investments which are low risk, low return.


by Cecilia at May 05, 2022, 08:48 PM

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Amie
8 months ago
Yeah, D is just about investing, not cash holding.
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Lemuel
9 months ago
A, B, and C make sense, but D? Nah.
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Scarlet
9 months ago
Wait, are we sure about that? Seems like a valid reason to me.
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Makeda
9 months ago
Totally agree, D is about maximizing returns, not holding cash!
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Lang
9 months ago
D is definitely not a reason to hold cash.
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Emilio
9 months ago
Okay, let me think this through. I'm leaning towards option C to open the URL builder in the admin panel. That seems like the most logical way to update the URL.
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Gearldine
9 months ago
Okay, let's think this through step-by-step. The key here is to determine the level of compliance based on TOGAF 9 guidelines. Even though the RPC mechanism doesn't match the spec, the rest of the system seems to be working correctly. I'm leaning towards option B, describing it as consistent.
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Tracey
10 months ago
I mixed these up in practice questions before! But I think since they all get the treasure if they all submit, it might be interdependent?
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