Investors Value Liquidity in an Asset Because

question 5

Multiple Choice

Investors value liquidity in an asset because

• A)liquid assets tend to have high rates of return.
• B)liquid assets incur lower selling costs.
• C)liquid assets incur lower tax liabilities.
• D)whereas liquid assets have high information costs, their low risk offsets this.

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Definitions:

Constraints

Limitations or restrictions that impact the options available in decision-making or process development.

Feasible Region

The set of all possible points that satisfy the constraints of an optimization problem, representing viable solution spaces.

Minimization Problem

A type of optimization problem where the objective is to find the minimum value of a function subject to certain constraints.

Objective Function

A mathematical expression representing the goal of an optimization problem, typically to maximize or minimize certain values.