Which of the Following Is CORRECT Regarding Liquidity

question 11

Multiple Choice

Which of the following is CORRECT regarding liquidity?

• A)Liquidity measures how quickly revenue can be earned.
• B)Accounts receivable is not a liquid asset.
• C)A balance sheet lists assets and liabilities in the order of relative liquidity.
• D)Equipment is a highly liquid asset.

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Definitions:

Risk Averse

The tendency of individuals or entities to prefer certainty over uncertainty, often choosing safer options over riskier ones to minimize potential losses.

Adverse Selection

A situation where sellers have information that buyers do not, or vice versa, often resulting in a market failure.

Utility Function

Represents a mathematical model in economics which shows preferences over a set of goods and services, depicting satisfaction levels of consumers.

Probability

The measure of the likelihood that an event will occur, often expressed as a number between 0 and 1.