When determining how much of the firm's total assets to invest in cash and securities,a low-liquidity strategy entails investing ___________ of the assets in cash and securities,earning ____________ expected profits in total.

Question

Quizplus · Accepted Answer

A low-liquidity strategy entails investing relatively less of the assets in cash and securities, which typically results in relatively more expected profits in total. This is because the firm is taking on greater risk by investing in less liquid assets, but is compensated with higher returns. Therefore, choice A is the best option.

When Determining How Much of the Firm's Total Assets to Invest