Your Friend Has Approached You Because She Just Read an Article

question 220

Essay

Your friend has approached you because she just read an article in the Paranormal Enquirer magazine that shows introverts are more likely to have extrasensory perception (ESP). What tips for evaluating media claims would you recommend to your friend?

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Definitions:

Transaction Motive

The need to hold cash to satisfy normal disbursement and collection activities associated with a firm’s ongoing operations.

Liquidity

Measures the ease with which an asset can be converted into cash without significantly affecting its price.

Speculative Motive

The need to hold cash to take advantage of additional investment opportunities, such as bargain purchases.

Liquidity

The ability of an asset to be converted into cash quickly and without any significant loss in value.