Which of the Following Statements Is True

question 56

Multiple Choice

Which of the following statements is true?

• A)Going-concern scenario refers to abnormal behaviour of cash flows in the course of business.
• B)Going-concern scenario focuses on the bank's liquidity policy in a worst-case scenario.
• C)Going-concern scenario focuses on the bank's day-to-day liquidity management.
• D)None of the listed options are correct.

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Definitions:

Unsecured Creditors

Creditors who have lent money without taking collateral. If the borrower defaults, these creditors stand behind secured creditors in the priority of claims.

Stockholders

Investors who own shares of stock in a corporation, holding a claim on its assets and earnings.

Spin-off

The creation of an independent company through the sale or distribution of new shares of an existing part of a parent corporation.

Equity Carve-out

A strategy where a parent company sells a minority interest of a subsidiary to outside investors while retaining control.