Firms hold cash to satisfy the transaction motive.This means that cash is held:
A) To meet disbursements for normal operations.
B) To balance the flow between cash inflows and outflows.
C) To make unexpected payments such as special price discounts.
D) Both A and B.
E) None of the above.
Correct Answer:
Verified
Q9: Marketability risk is synonymous with:
A)maturity risk.
B)default risk.
C)liquidity
Q11: If a firm has achieved its target
Q12: Firms hold cash, in part, to satisfy
Q13: The Baumol cash balance model is limited
Q15: The lower cash limit, L, and the
Q15: Examples of cash disbursements do not include:
A)
Q17: The cost of holding cash:
A)Is the opportunity
Q18: The target cash balance is reached when:
A)the
Q20: The Baumol model determines the optimal cash
Q21: The difference between bank cash and book
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