As of 2013,the Outstanding U

question 56

Multiple Choice

As of 2013,the outstanding U.S.currency is more than $1 trillion,which suggests that the typical U.S.citizen holds $3,600 in cash.Is this an accurate inference? Why?

• A)Yes;because dividing total currency by total U.S.population roughly works out to $3,600 per person.
• B)No;because criminals and foreigners hold large sums of dollars,so the average citizen holds far less.
• C)No;because the average citizen probably does not have $3,600 in her checking account.
• D)Yes;because the Fed rarely makes accounting mistakes when computing M1.
• E)none of the above

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Definitions:

Overall Cost Of Capital

The weighted average of the costs of all sources of financing used by a firm, including debt and equity.

Invested Funds

Money placed into vehicles like stocks, bonds, or mutual funds with the expectation of earning a return.

Cost Of Capital

The return rate that a company must earn on an investment to maintain its market value and attract funds.

Cash Flows

The complete sum of financial resources being exchanged within a business, profoundly impacting its immediate financial health.