Which of the Following Are Reasons Why a Person May

question 45

Multiple Choice

Which of the following are reasons why a person may want to warehouse liquidity?
I. protect against total loss
II. ability to exploit future opportunities
III. capitalize on the high rates of return available on cash
IV. protect against the need to disturb the existing portfolio

• A) I and II only
• B) I, II and IV only
• C) II, III and IV only
• D) I, II, III and IV

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Definitions:

Annual Depreciation

Definition: The portion of the cost of a fixed asset that is expensed on an annual basis through the process of depreciation.

Book Value

The net value of a company's assets minus its liabilities, often used to assess the financial health of a business.

Double-Declining-Balance Method

An accelerated method of depreciation that doubles the normal depreciation rate.

Journal Entry

A record of a transaction in the accounting journal that may affect one or more accounts.