What factor determines the amount invested in cash?

The amount invested in cash is primarily determined by the size of the cash flow requirement. This factor is crucial because it reflects the immediate financial needs or obligations that an individual or business faces. When planning investments, ensuring that sufficient cash is available to meet these requirements is essential. For instance, if a company has upcoming expenses or financial commitments, it will need to allocate a specific amount to cash holdings to ensure liquidity.

While the other options can influence investment strategies—such as the expected rate of return on other investments possibly guiding whether more aggressive or conservative investments are made—these factors do not directly dictate the actual cash amount needed. Similarly, investment fees might impact overall profitability but do not determine cash flow requirements. The time period of the investment can influence the maturity of investments but does not specifically dictate how much cash is necessary to maintain liquidity. Thus, the primary determinant is indeed the size of the cash flow requirement, as it directly relates to ensuring that one can meet financial obligations efficiently.