Which statement is true regarding cash investments?

The statement that investment in cash depends on cash flow requirements is accurate because cash investments are often influenced by an individual's or an organization's need for liquidity. When there is a requirement for cash flow, such as covering immediate expenses, emergency funds, or managing liabilities, individuals and businesses will prioritize holding cash or cash equivalents. This allows for flexibility and readiness to respond to financial obligations.

In contrast, other options fail to capture the broader context of cash investments. High yield potential is generally associated with riskier assets that have the potential for greater returns, while cash typically offers lower yields due to its safe nature. During bull market runs in the stock market, investors are more likely to invest in stocks and equities rather than cash, as they chase higher returns. Lastly, rising interest rates often provide opportunities for cash investments to yield better returns, making cash more attractive rather than decreasing its investment. Therefore, the essence of cash investments being contingent on cash flow needs underscores the importance of liquidity in financial management.