Mr. Wellington is studying for an accounting test and has developed the following Understand debt and stock questions about investments.

1:

Au BWN What are three reasons why companies purchase investments in debt or stock securities?

. Why would a corporation have excess cash that it does not need for operations?

. What is the typical investment when investing cash for short periods of time?

. What are the typical investments when investing cash to generate earnings?

. Why would a company invest in securities that provide no current cash flows?

. What is the typical stock investment when investing cash for strategic reasons?

Instructions Provide answers for Mr. Wellington.