An Operating Loan Is Useful for All of the Following

question 22

Multiple Choice

An operating loan is useful for all of the following, except:

• A) To cover your day-to-day expenses
• B) To purchase additional inventory in anticipation of your peak selling period
• C) To bridge unexpected cash flow interruptions and/or shortfalls
• D) For long-term, costly capital expenditures

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Definitions:

Purchasing Power

The worth of a currency depicted by the quantity of goods or services that can be purchased with one unit of the currency.

Expected Variance

Expected Variance is a statistical measure that captures the anticipated variability or dispersion of returns on an investment.

Probability Distribution

A mathematical tool that catalogues all possible values a random variable could assume and their likelihoods within a specified range.

Stock of the Economy

The stock of the economy typically refers to the total value of assets, both financial and physical, possessed within an economy at a given time.