If the Volatility of the Daily Cash Flows Decreases, a Firm

question 95

Multiple Choice

If the volatility of the daily cash flows decreases, a firm will:

• A)increase the cash balance.
• B)decrease the cash balance.
• C)not change the cash balance.
• D)increase the return point.

---

Definitions:

Alkene

A hydrocarbon that contains at least one carbon-carbon double bond, characterized by the general formula CnH2n.

Heat Of Hydrogenation

The heat released during the addition of hydrogen to a double or triple bond in unsaturated hydrocarbons.

(E)-2-Pentene

An alkene that has the two largest groups on each end of the double bond in opposite directions, which is the trans configuration.

(Z)-2-Pentene

An alkene where the two largest groups on each side of the double bond are on the same side, resulting in a cis configuration.