There are a few advantages and disadvantages to short term and long term investments. Long term investments are easier to risk because of the time period, however some people prefer to invest in short term investments to test the risk first. Making a decision on which method to proceed with depends on the individual or the company, its past financial activities and how much the individual or company is willing to risk. There are 4 strategic purposes for investing in a Long term investments:

1. Reduction of costs: when one company buys another company, the combined company may be able to reduce administrative costs

2. Replacement of Management

3. Expansion

4. Integration: a companh may integrate operations by acquiring a supplier or customer

Question: Do the above strategic purposes of long term investments also apply to Short Term Investments? Why or why not?