1. Which one of the following characteristics applies to commercial paper?
Maturities of 270 days or more
Offerings registered with the SEC
Interest rates higher than comparable bank loans
Issued directly by large-sized firms
2. Baxter's, Inc. generally holds $125,000 in cash in case an unexpected investment opportunity arises. Which one of the following refers to holding cash for this type of purpose?
Precautionary motive
Opportunistic motive
Speculative motive
Reserve motive
3. Float is defined as the difference between which of the following?
Beginning cash balance and the ending cash balance as shown on a cash budget
Ledger balance and the available balance
Book balance and the ledger balance
Collections and disbursements for any given period of time