The Main Disadvantage of Using Money as a Store of Value

question 14

Multiple Choice

The main disadvantage of using money as a store of value is that:

• A)other assets provide greater anonymity than cash.
• B)barter is a more efficient way to conduct transactions than using money.
• C)unlike other assets, money serves as a medium of exchange.
• D)other assets pay relatively higher rates of interest than money.

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Definitions:

Compromise Dividend Policy

A strategy that aims to balance between retaining earnings for reinvestment and paying dividends to shareholders.

Residual Dividend Approach

A policy for determining dividend payments whereby dividends are set as the earnings left over after funding the company's capital expenditure and working capital needs.

Trading Range

The spread between the high and low prices at which a security trades over a certain period of time.

Stock Split

A corporate action where a company divides its existing shares into multiple shares to increase the number of shares outstanding.