In which scenario would an investor likely prefer a short-term investment?

An investor would likely prefer a short-term investment primarily for the purpose of retaining liquidity and ensuring quick access to funds. Short-term investments, by their nature, are designed to be easily convertible to cash, making them ideal for investors who may need immediate access to their money. This aligns with the typical goals of risk-averse investors, those who anticipate needing their funds in the near future, or those looking to balance their portfolios with cash-like assets for unforeseen expenses or opportunities.

Investors often choose short-term options such as money market accounts, certificates of deposit with short maturities, or Treasury bills when they expect market conditions to change or wish to avoid long-term commitments. This flexibility is particularly appealing during times of economic uncertainty or when unforeseen financial needs arise, as it allows them to maintain a level of control over their financial situation.

While other scenarios might suggest different investment strategies—such as capitalizing on market growth or aiming for long-term gains—the primary motivation for opting for short-term investments is the need for liquidity and the ability to access funds rapidly when necessary.