Firms Hold Cash, in Part, to Satisfy Compensating Balances

question 45

Multiple Choice

Firms hold cash, in part, to satisfy compensating balances.Compensating balances are:

• A)cash balances held at the firm in excess of its transactions needs.
• B)cash balances held at the firm that are below that of its transactions needs.
• C)cash balances held at the firm in excess of its cash inflows.
• D)cash balances held at commercial banks to pay implicitly for bank services.
• E)None of the above.

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Definitions:

Myers-Briggs Type Indicator

A psychological assessment tool designed to measure individual personality types based on preferences in perception and decision-making.

Thinking

The process of considering or reasoning about something, often relevant in the context of planning, problem-solving, and decision-making in project management.

DISC Acronym

DISC stands for Dominance, Influence, Steadiness, and Conscientiousness, which are the four personality traits it assesses.

Dominance

Refers to the influence or control one party has over another, often seen in market positions or hierarchical relationships.