The ________ motive for holding cash is the need to pay debts that arise as a regular consequence of doing business. A) Transactional B) Precautionary C) Speculative D) Intuitive ANSWER A
Date: September 19th, 2020
Dividends are the only means by which firms can distribute cash to shareholders. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
The primary advantage of Eurobonds is A) the fact that LIBOR is set in competitive markets and enables firms to borrow funds at lower interest rates. B) more favorable tax treatment of earnings compared with the U.S. C) the relative lack of regulation compared with similar markets in the U.S. D) their greater degree of […]
Date: September 19th, 2020
The ________ motive for holding cash is to take advantage of bargain purchases or opportunities that might arise. A) Transactional B) Precautionary C) Intuitive D) Speculative ANSWER D
Date: September 19th, 2020
The ________ motive for holding cash is the need for a safety supply to act as a financial reserve against unexpected events. A) Transactional B) Precautionary C) Speculative D) Intuitive ANSWER B
Date: September 19th, 2020
The usual sources of capital for investing projects include all of the following EXCEPT: A) LIBOR. B) Retained Earnings. C) Bank Loans. D) Domestically Marketed Stocks and Bonds. ANSWER A
Date: September 19th, 2020
The interest rate on Eurodollar loans tends to be based on A) Eurobonds B) Forward rates C) Spot rates D) LIBOR ANSWER D
Date: September 19th, 2020
The three motives for holding cash are: A) float reduction, precautionary, and speculative. B) buffer stock, speculative, and transactional. C) speculative, transactional, and precautionary. D) float reduction, buffer stock, and transactional. E) convenience, transactional, and precautionary. ANSWER C
Date: September 19th, 2020
What is a danger in using only short term borrowing? A) Higher rates than long term borrowing B) Lower fee per loan C) Cost of borrowing can increase D) Less flexibility ANSWER C
Date: September 19th, 2020
What is an advantage of short term lending for banks? A) New fees every loan B) More flexibility C) Locked in rates D) Increased clients ANSWER A
Date: September 19th, 2020
