Which of the Following Statements Is Correct

question 1

Multiple Choice

Which of the following statements is correct?

• A) The cash balances of most firms consist of transactions,compensating,precautionary,and speculative balances.The total desired cash balance can be determined by calculating the amount needed for each purpose and then summing them together.
• B) The easier a firm's access to borrowed funds the higher its precautionary balances will be,in order to protect against sudden increases in interest rates.
• C) For some firms,holding highly liquid marketable securities is a substitute for holding cash because the marketable securities accomplish the same objective as cash.
• D) Firms today are more likely to rely on cash than on reserve borrowing power or marketable securities for speculative purposes because of the need to move quickly.
• E) Each of the above statements is false.

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Definitions:

Loud Noise

Sound that is strong and high in decibels, potentially causing harm or disturbance to human hearing and mental health.

White Rat

Often used in psychological and medical research, white rats are a common type of laboratory rat chosen for their genetic uniformity and ease of observation.

Watson and Rayner

Refers to John B. Watson and Rosalie Rayner, psychologists known for their experiment on classical conditioning with "Little Albert," demonstrating that emotional responses could be conditioned.

Bounded Ethicality

The concept that cognitive biases, social pressures, and situational factors can limit an individual's ability to make ethical decisions, even when they have the intention to act ethically.