Which of the Following Combinations of Asset Structures and Financing

question 37

Multiple Choice

Which of the following combinations of asset structures and financing patterns is likely to create the most volatile earnings?

• A) illiquid assets and heavy short-term borrowing
• B) illiquid assets and heavy long-term borrowing
• C) liquid assets and heavy long-term borrowing
• D) liquid assets and heavy short-term borrowing

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Definitions:

Citrate

A salt or ester of citric acid that plays a key role in the Krebs cycle, a central pathway in cellular respiration.

Oxaloacetate

A four-carbon molecule that acts as a key intermediate in the citric acid cycle and gluconeogenesis.

Mitochondrial Intermembrane

The space located between the inner and outer membranes of mitochondria, involved in the electron transport chain.

ATP Synthase

An enzyme complex that produces ATP from ADP and inorganic phosphate during cellular respiration and photosynthesis.