Which of the Following Statements Is CORRECT

question 90

Multiple Choice

Which of the following statements is CORRECT?

• A) The statement of cash flows reflects cash flows from operations,but it does not reflect the effects of buying or selling fixed assets.
• B) The statement of cash flows shows where the firm's cash is located;indeed,it provides a listing of all banks and brokerage houses where cash is on deposit.
• C) The statement of cash flows reflects cash flows from continuing operations,but it does not reflect the effects of changes in working capital.
• D) The statement of cash flows reflects cash flows from operations and from borrowings,but it does not reflect cash obtained by selling new common stock.
• E) The statement of cash flows shows how much the firm's cash--the total of currency,bank deposits,and short-term liquid securities (or cash equivalents)--increased or decreased during a given year.

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Definitions:

Interest Rate Risk

The potential for investment losses due to fluctuations in interest rates, which can affect the value of interest-bearing assets like bonds.

Price Appreciation

The increase in the value of an asset or investment over time, not accounting for dividends or interest earned.

Ceteris Paribus

A Latin phrase meaning "all other things being equal," used in economics to isolate the effect of one variable by holding others constant.

Yield

The income return on an investment, such as the interest or dividends received, expressed as a percentage of the investment's cost.