Which of the Following Statements Is True

question 85

Multiple Choice

Which of the following statements is true?

• A)While the financial system creates financial assets, it plays no role in increasing their liquidity.
• B)While financial assets are not created by the financial system, the financial system provides ways of increasing their liquidity.
• C)The financial system has little to do with either creating or increasing the liquidity of financial assets.
• D)The financial system both creates financial assets and provides ways of increasing their liquidity.

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Definitions:

Accumulated Depreciation

A contra-asset account that summarizes or accumulates the amount of depreciation that has been taken on an asset.

Original Cost

The initial purchase price or cost of acquiring an asset including any additional expenses necessary to get it operational.

Cash Provided

The liquidity generated by a company's operations, which may include cash from revenue as well as financing and investing activities.

Financing Activities

Activities that result in changes in the size and composition of the equity capital and borrowings of an entity.