Which of the Following Statements Is TRUE

question 13

Multiple Choice

Which of the following statements is TRUE?

• A)A liquid asset is one that can be quickly and cheaply converted into cash.
• B)The demand for a bond declines when it becomes less liquid,decreasing the interest rate spread between it and relatively more liquid bonds.
• C)The differences in bond interest rates reflect differences in default risk only.
• D)The corporate bond market is the most liquid bond market.

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Definitions:

Treasury Stock

Shares that were issued and subsequently reacquired by the issuing company, reducing the amount of outstanding stock on the open market.

Net Cash Flow

The difference between a company's cash inflows and outflows within a specific period, indicating its financial health.

Operating Activities

Financial transactions and events that affect the net income of a business.

Accounts Payable

The amount of money a company owes to its suppliers or creditors for goods and services received but not yet paid for, typically due within a year.