Which of the Following Is Not True of Liquidity or Marketability

question 93

Multiple Choice

Which of the following is not true of liquidity or marketability risk or discount?

• A) It is measurable.
• B) It is believed to have declined in recent years
• C) The magnitude of the discount or risk is inversely related to the size of the investor's equity ownership in the business.
• D) The magnitude of the discount or risk is directly related to the size of the investor's equity ownership in the business.
• E) It is important to adjust the discount rate for liquidity risk.

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Definitions:

Opportunity Cost

The cost of forgoing the next best alternative when making a decision or choosing between options.

OLED TVs

Televisions that use Organic Light-Emitting Diodes for a better display with higher contrast, deeper blacks, and a wider viewing angle compared to traditional LCDs.

LCD TVs

Liquid Crystal Display Televisions, a technology for displaying images.

Opportunity Cost

The next best alternative forgone as the result of making a decision.