Which of the Following Statements Best Represents What Finance Is

question 56

Multiple Choice

Which of the following statements best represents what finance is about?

• A)The study of how political, social and economic forces affect corporations
• B)Maximising profits
• C)The study of how people and businesses make investment decisions and how to finance those decisions
• D)Reducing risk

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Definitions:

Horizontal Analysis

A financial analysis technique that compares line items in financial statements over a period of time, to identify trends or significant changes.

Liquidity Analysis

An assessment of a company's ability to meet its short-term financial obligations, involving the examination of assets that can be quickly converted into cash.

Quick Assets

Assets that can be quickly converted into cash within 90 days or less, such as cash, marketable securities, and accounts receivable.

Marketable Securities

Financial instruments that can be easily converted into cash, such as stocks and bonds, typically held for short-term investment purposes.