Which of the Following Is Not a Reason for a Firm

question 2

Multiple Choice

Which of the following is not a reason for a firm to hold cash balances?

• A)To cover routine payments and collections.
• B)To earn high rates of interest.
• C)To meet compensating balance requirements of banks.
• D)To provide a safety stock in the event of unforeseen fluctuations into cash flows.
• E)To take advantage of bargain purchases that might arise.

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Definitions:

Psychological Disorder

A psychological disorder is a condition characterized by abnormal thoughts, feelings, or behaviors that cause significant distress or impairment in social, occupational, or other important areas of functioning.

Biological Abnormality

An irregularity or dysfunction within biological systems or processes, often underlying certain psychological or physical disorders.

Abnormal Behavior

Actions, thoughts, or emotions that deviate significantly from the norm within a culture or society, potentially interfering with personal function.

DSM-IV

The Diagnostic and Statistical Manual of Mental Disorders, Fourth Edition, a guideline published by the American Psychiatric Association that classifies and defines mental disorders.