An Asset Is Considered Liquid If It

question 68

Multiple Choice

An asset is considered liquid if it

• A)can be used as a store of value.
• B)has a guaranteed rate of return.
• C)is indexed to the rate of inflation.
• D)acts as a medium of exchange.
• E) none of the above

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Definitions:

Financing Activities

Activities involving the flow of cash between a company and its investors or creditors, impacting the company’s capital structure.

Direct Method

A cash flow statement preparation approach that lists specific types of operating cash receipts and payments, making it straightforward to see sources and uses of cash.

Financing Activities

Transactions that involve raising capital and repaying investors, affecting the equity and liabilities on the company's balance sheet.

Private Corporations

Companies that are owned by a small group of individuals and do not offer their shares of stock to the general public.