The Risk of the Conservative Funding Requirements Is Low Because

question 53

True/False

The risk of the conservative funding requirements is low because of its high level of net working capital, and the fact that the strategy does not require a firm to use any of its limited short-term borrowing capacity.

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Definitions:

Absolute Value

The non-negative value of a number regardless of its sign.

Elasticity

a measure of how much the quantity demanded or supplied of a good responds to a change in one of its determinants, such as price.

Quantity Effect

The change in quantity demanded or supplied as a result of changes in price.

Price Effect

The impact that a change in the price of a good or service has on its demand or supply.