Which of the Following Statements About Investment of Idle Cash

Multiple Choice

Which of the following statements about investment of idle cash balances in longer-term (but not long-term) fixed-period investments is false?

A) Companies can usually obtain a higher interest rate on longer term investments.
B) Higher transaction costs of continual reinvestment in short-term securities can usually be avoided.
C) A problem with such a cash management policy is the possibility of an unforeseen cash shortage.
D) Longer term fixed-interest securities are not considered as alternative investments to holding cash.