When Using a Cash Control Model Which Targets a Specific

question 26

Multiple Choice

When using a cash control model which targets a specific cash balance, what is the problem associated with the cash level breaching the upper, outer limit for an unacceptable length of time?

• A) The inability to meet short term financial commitments.
• B) The risk of theft.
• C) The opportunity cost of foregone interest.
• D) A rise in the cost of capital.
• E) A negative impact on the company's credit rating.

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Definitions:

Five-factor Model

A comprehensive framework for understanding personality, comprised of five broad dimensions: openness, conscientiousness, extraversion, agreeableness, and neuroticism.

Stereotypes

Widely held but fixed and oversimplified images or ideas of a particular type of person or thing.

Projective Tests

Personality tests that ask subjects to respond to vague, ambiguous stimuli in ways that may reveal the respondents’ needs, feelings, and personality traits.

Inconsistent Scoring

A situation where the assessment or evaluation criteria yield varying results over time or across different evaluators, leading to unpredictability in measurements or judgments.