Most Large fiRms Hold a Cash Balance Greater Than Most

question 101

Multiple Choice

Most large firms hold a cash balance greater than most models imply because:

• A)it is too difficult to estimate the costs of security transactions.
• B)banks are compensated by account balances for payment of services.
• C)corporations have few bank accounts and it is difficult to manage their cash.
• D)cash is costless and need not be managed closely.
• E)None of the above.

---

Definitions:

Companionate Love

A form of love characterized by deep affection, friendship, and emotional intimacy, as opposed to passionate love.

Actor/Observer Bias

A cognitive bias involving the tendency to attribute one's own actions to external factors, while attributing others' actions to their personalities.

Mere Exposure Effect

The mere exposure effect is a psychological phenomenon where people tend to develop a preference for things merely because they are familiar with them.

Attributional Style

A person's habitual way of explaining outcomes in their life, whether these are positive or negative events.