If a Firm Maintains a Relatively High Level of Investments

question 413

Multiple Choice

If a firm maintains a relatively high level of investments in cash and marketable securities, which of the following statements is true?

• A) The firm is probably following a restrictive short-term financial policy.
• B) The firm adds little to shareholder wealth by making these types of investments.
• C) The chances of the firm facing financial distress are increased by this policy.
• D) The firm likely faces a relatively high level of shortage costs.
• E) The firm faces a relatively low level of opportunity costs.

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Definitions:

Valvular Disorder

A medical condition affecting the heart valves’ ability to open and close properly, impacting blood flow.

SA Node

The sinoatrial node, often regarded as the heart's natural pacemaker, initiates electrical impulses that determine the heart rate.

AV Node

The Atrioventricular Node, a critical component of the heart's electrical system, responsible for controlling the timing of heart muscle contractions.

Bundle of His

A group of specialized heart muscle cells that are designed for electrical signaling, responsible for carrying impulses from the AV node to the heart's ventricles.