There is need for liquidity management because demand for liquidity during a particular year is rarely equal to supply of liquidity during the year Select one: O True O False

Q: Your company has a policy to use long-term debt to finance inventory and receivables. This is a…

A: When the working capital requirements are financed through long-term debt then it depicts that the…

Q: 19. The slope of the SML is determined by the value of market risk premium. a. True b. False

A: “Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: decrease in reserve requirements could lead to an    A. increase in bank lending.   B. increase…

A: The Money supply and demand of money is affected by reserve requirement of bank which are placed by…

Q: Give typing answer with explanation and conclusion What is liquidity a measure of? Discuss the…

A: Answer:- The operational effectiveness of a firm's capacity to handle it resources in a way that…

Q: The claims (losses) incurred insuring against the peril may result in underwriting risk due to? a.…

A: Underwriting risk is the risk faced by an insurance company that it may suffer losses due to the…

Q: Which one of the following statements is FALSE? Select one: O a. Holding more liquid funds will…

A: Introduction and explanation :The yield of an asset refers to the return or profit generated from…

Q: The discounted payback method is better than the regular payback method because  The time value of…

A: Payback period is the amount of time required to recover initial investment. Regular payback period…

Q: Why is a high quick ratio not always a good indication of a well-managed liquidity position?

A: Liquidity: Liquidity means how quickly you can get your hands on your cash. Liquidity is to get your…

Q: ain reason for the failure of óf anies is the occurrence of a ty resulting from the decrea s for…

A: A liquidity crisis is frequently created by a mismatch in maturity between assets and obligations,…

Q: Liquidity

A: A firm’s liquidity position plays a very important role in ensuring its survival in the market.

Q: Holding everything else constant, an increase in cash will decrease Omay increase or decrease O will…

A: Net debt is a financial metric that represents the difference between the company's total debt and…

Q: The risk of not having sufficient cash and borrowing capacity to meet deposit withdrawals, loan…

A: Interest rate risk refers to risk of change in value of investments due to change in interest rates…

Q: TRUE OR FALSE 1. Short-term financial policies that are flexible with regard to current assets…

A: 1. Short-term financial policies that are flexible with regard to current assets includes keeping…

Q: Is the value of money affected by time, and if it is, in which direction? O a. It is not affected O…

A: The value of time of money is the idea that the money currently available is worth more than the…

Q: The higher the accounts receivable, the higher the capital requirement needed by the company to…

A: Accounts receivable is the current assets of a firm which reflects the amount owed to customers for…

Q: cash flow frequ ot the same, one W oved: the period

A: Period interest rate approach : In simple words, the period interest rate approach refers to the…

Q: If short - term rate - sensitivity asset - liability GAP is negative : a)Decrease in Interest Rate…

A: Several statements have been provided explaining the impact of net interest income in case short -…

Q: Instruction: For each statement, begin by answering whether the statement is true or false. If you…

A: Since you have posted the question with multiple sub-parts, we will solve the three first three…

Q: Can free cash flow continue to grow, even if ROIC falls? Explain.

A: If the working capital of the company can be managed free cash flow can grow at a better rate even…

Q: Explain why the APV model is suited for situations in which the capitalstructure is changing during…

A: APV is a DCF method which is similar to NPV method but the only difference that APV has is that it…

Q: Liquidity risk is a. The risk of doing business in a particular industry or environment b. The…

A: When short term debt obligations of individual investor or business or financial institutions are…

Q: Give typing answer with explanation and conclusion  Which of the following are violations of…

A: The weak-form Efficient Market Hypothesis (EMH) states that all past price and volume data is…

Q: The additional return earned by holding a commodity that is in short supply or a nonpecuniary gain…

A: Answer- The Convenience Yield - A premium that is earned by people who hold a physical commodity.…

Q: Liquidity dry up could cause a financial institutions to become balance sheet insolvent. Briefly…

A: Liquidity dry up occurs when financial institutions have a shortage of accounting, funding, and…

Q: time value of money to general situations where compounding is induced by growth, inflation, or…

A: Time Value of Money is one of the most important concepts of finance when it comes to the…

Q: Too much money in an economy with too little goods and services creates:

A: High amount of money in the market with little goods or services will create an imbalance in the…

Q: A debt amortization schedule prepared for each debt and equity is considered a good control. O True…

A: Debt Amortization Schedule: A loan amortisation schedule is a comprehensive table of periodic loan…

Q: What is a question that should be asked about accounts payable when forecasting? a.) What are the…

A: Accounts payable mirrors the obligation of a business to the leasers or providers, if there should…

Q: Is excess liquidity a serious issue? Would insufficient liquidity be much worse? Please discuss

A: Excess liquidity means that the company is holding excess assets in cash or liquid instruments that…

Q: What are the problems of too much or too little liquidity?

A: If the available liquidity is more than the required amount then such an excess is called Excess…

Q: All else equal, as market interest rates fall, the present value of a future cash flow. the…

A: Present value is the equivalent today based on time value of money of the future cash flow that is…

Q: Balance Sheet Insolvency occurs when Liabilities are greater than the Assets resulting in negative…

A: Insolvency Risk: Insolvency risk is a probability that an enterprise cannot satisfy its debt…

Q: Negative cash flow to creditors

A: The 3 main components of the cash flow statement are as follows: Cash from operating activities…

Q: Minimizing liquidity is an excellent way to meet a company's short-term financial obligations. 1)…

A: Liquidity means ability of the company in paying its short term obligations or liabilities.…

Q: Finance in classical economics studies all of the following issues EXCEPT Time value of money…

A: Finance in calssical studies all the following: time value of money, equilibrium price risk, asset/…

Q: he firm has adequate cash to pay bills

A: The stakeholders of the entity evaluate the financials of the company in many possible ways.…

Q: Liquidity means that the firm has Select one: a. Adequate cash. b. None of the options . c. Less…

A: Liquidity: It implies the ability or ease with which the company's assets can be translated into…

Q: True False

A: The receivables turnover ratio is a metric that indicates how efficiently a firm collects on its…

Q: Reinvestment risk occurs when a financial institution holds longer-term assets relative to…

A: Reinvesting means putting the profit back into the same scheme.

Q: In the periods of inflation, the historical cost model .can communicate useful and correct…

A: Inflation is the increase in the general prices of goods and services that leads to a decrease in…

Q: If a bank has a negative gap, it is likely that it has a:   a. positive duration gap. b. negative…

A: interest rate gap give the risk of interest on assets and laibilties  Negative gap indicates that…

Q: Refers to the inability of the business to meet its obligations as they mature on account of…

A: Hi There, Thanks for posting the questions. As per our Q&A guidelines, must be answered only one…

Q: The deterioration of the balance sheet of financial institutions leads to : a. a deleveraging…

A: Effect of deterioration on the balance sheet of financial institutions: When a financial…