A Precautionary Cash Balance

question 36

Multiple Choice

A precautionary cash balance:

• A)is used to replace spoiled or damaged inventory.
• B)is held to facilitate cash disbursements when receipts slow down.
• C)is used for normal day-to-day operations.
• D)is held for the benefit of a sister affiliate.

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Definitions:

Upper Limit

The maximum value in a set or the highest value that a variable can take.

Significance Level

A threshold chosen by a researcher or statistician below which a p-value indicates a statistically significant result, rejecting the null hypothesis.

Mean Age

The average age of all individuals in a particular group or set, calculated by summing their ages and dividing by the number of individuals.

Life Insurance

A contract between an insurer and a policyholder in which the insurer guarantees payment of a death benefit to named beneficiaries upon the death of the insured.