The Marginal Benefit of Additional Information

question 167

Multiple Choice

The marginal benefit of additional information

• A) rises as more information is collected.
• B) is independent of the size of the expenditure.
• C) tends to be smaller for expensive items,such as a car.
• D) is constant.
• E) falls as more information is collected.

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Definitions:

Maturity

The date on which a financial instrument, such as a bond or loan, is due to be repaid in full.

Operating Line of Credit

A flexible loan from a bank that provides a maximum loan balance that the borrower can access for its short-term capital needs.

Company's Liquidity

An indicator of a company's ability to meet its short-term financial obligations, ensuring it has enough cash or liquid assets.

Interest (Finance) Expenses

Costs incurred by an entity for borrowed funds; these expenses may include the cost of debt or loan interest payments.