When a Firm Has Excessive Cash, Managers May Make Use

question 42

Multiple Choice

When a firm has excessive cash, managers may make use of the funds in an inefficient manner. This is also referred to as the cost of retaining cash.

• A) agency
• B) fixed
• C) interest
• D) special

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Definitions:

Milgram Experiment

A psychological experiment conducted by Stanley Milgram in the 1960s to study obedience to authority, where participants were instructed to administer electric shocks to another person.

Stanford University Prison Experiment

A psychological study conducted by Philip Zimbardo in 1971 at Stanford University, where students were assigned roles of prisoners and guards to explore the effects of perceived power.

Generalization

Drawing a conclusion about a certain characteristic of a population based on a sample from it.

Logical Support

The provision of reasons or evidence to justify a claim or argument.