Which of the Following Statements Is Most Correct

question 97

Multiple Choice

Which of the following statements is most correct?

• A) The cash balances of most firms consist of transactions, compensating, and precautionary balances. The total desired cash balance can be determined by calculating the amount needed for each purpose and then summing them together.
• B) The easier a firm's access to borrowed funds, the higher its precautionary balances will be in order to protect against sudden increases in interest rates.
• C) For some firms holding highly liquid marketable securities is a substitute for holding cash, because the marketable securities accomplish the same objective as cash.
• D) All companies hold the same amount of funds for a transaction balance.
• E) None of the statements above is correct.

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Definitions:

Reaction Structure

The detailed arrangement of atoms and bonds in the reactants and products of a chemical reaction.

Reaction Structure

The arrangement and connectivity of atoms and the types of chemical bonds within the species participating in a chemical reaction.

Organic Product

A compound containing carbon atoms that have been created as the result of a chemical reaction involving organic molecules.

Reaction Structure

The molecular arrangement and bonds of reactants and products in a chemical reaction process.