Regarding a motive for maintaining liquidity, which of the following is true? Multiple Choice Firms need to hold cash as a buffer between inflowing and outflowing transactions. Firms should maintain compensating balances just in case they encounter an emergency situation. The increasing use of electronic funds transfers is increasing the transectional motive to hold cash. International firms have a transactional motive to hold cash in case favorable exchange rates become available. Firms need to hold cash for precautionary motives especially since money market accounts are not very liquid.
Regarding a motive for maintaining liquidity, which of the following is true? Multiple Choice Firms need to hold cash as a buffer between inflowing and outflowing transactions. Firms should maintain compensating balances just in case they encounter an emergency situation. The increasing use of electronic funds transfers is increasing the transectional motive to hold cash. International firms have a transactional motive to hold cash in case favorable exchange rates become available. Firms need to hold cash for precautionary motives especially since money market accounts are not very liquid.
Financial Reporting, Financial Statement Analysis and Valuation
8th Edition
ISBN:9781285190907
Author:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
Publisher:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
Chapter10: Forecasting Financial Statement
Section: Chapter Questions
Problem 6QE
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