Which Statement Is True

question 97

Multiple Choice

Which statement is true?

• A) The less liquid assets a firm holds, the less likely it is that the firm will experience financial distress.
• B) The lower the liquidity ratios, the less liquidity risk a firm has.
• C) Liquid assets generate profits for the firm.
• D) Extremely high levels of liquidity guard against liquidity crises, but at the cost of lower returns on assets.

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Definitions:

Corporate

Relating to a large company or group of companies authorized to act as a single entity.

Body Positions

The posture or arrangement of the body, often communicating nonverbal cues or aiding in task performance.

Uncrossed Arms

A body language cue indicating openness, receptiveness, or a non-defensive attitude.

Leaning Forward

A body language gesture that indicates interest, attentiveness, and engagement in the ongoing communication or situation.