Which of the Following Statements Is Correct

question 313

Multiple Choice

Which of the following statements is correct?

• A) In the Miller-Orr model the greater the interest rate, the greater the target cash balance.
• B) In the BAT model the greater the order cost, the higher the target cash balance.
• C) If a firm chooses to borrow, rather than invest in marketable securities, it will find that borrowing is likely to be less expensive than selling marketable securities.
• D) A firm is less likely to have to borrow to cover an unexpected cash outflow the greater its cash flow variability.
• E) A firm is less likely to have to borrow to cover an unexpected cash outflow the lower its investment in marketable securities.

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Definitions:

Ototoxic

Having a toxic effect on the ear or its nerve supply, often referring to drugs or substances that can cause hearing loss or balance disorders.

Gentamicin

An antibiotic used to treat various bacterial infections, especially those caused by bacteria resistant to other antibiotics.

External Ear

The outer portion of the ear, consisting of the pinna and the ear canal, which gathers sound waves and directs them inward.

Cerumen

A natural, waxy substance produced by glands in the ear canal that helps protect and lubricate the ear.