Which of the Following Statements Will Not Result in the Flow

question 15

Multiple Choice

Which of the following statements will not result in the flow of funds from cash surplus companies to companies that require cash?

• A)Investment by companies in commercial bills.
• B)Investments by companies in government securities.
• C)Investment by companies in cash deposits at a bank.
• D)Investment by companies in short-term deposits at a financial institution.

Skill in assessing a company's liquidity through working capital, current ratio, and acid-test ratio.

Competence in evaluating a company's profitability through margins and returns.

Capacity to interpret a company's operating efficiency through turnover ratios.

Knowledge of how dividends affect a company's financial metrics.

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Definitions:

Equity Securities

Financial instruments representing ownership interest in a company, such as stocks.

Redeemability

The quality of being able to be redeemed or converted into some form of value or benefit.

Redemption

The act of buying back something previously sold, such as a company repurchasing its own shares from investors.

Stated Capital

This refers to the capital that a corporation declares in its charter as its official capital.