1. Liquidity means the ability of the business to pay its short-term liabilities.
The more cash or cash equivalents the business has- the more liquid it is.
Unexpected demand for increase in the loan.
An unexpected increase in withdrawals by depositors.
Both of them depletes the business of cash. Hence increasing its
liquidity risk.
Answer: An unexpected demand for increase in the loan.
An unexpected increase in withdrawals by depositors.
2. Answer: A, C.
Raising cash by selling T-bill and commercial paper.
Raising cash by issuing commercial paper.
Both of them brings in cash to meet the business's short term liabilities. Hence improving businesses liquidity.
6. Liquidity risk Which of the following are sources of liquidity risk? Check all that apply....
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What are sources of short-term financing? Check all that apply: Short-term bank loans Accounts receivable financing Inventory financing Accounts payable Commercial paper
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Which of the following are sources of inefficiency in a regulated industry? Check all that apply. a. The absence of competitive market prices b. Paperwork and legal proceedings c. The lack of a profit incentive to innovate
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23. All of the following are considered to be "cash equivalents" except A. Treasury bills B. Commercial paper C. money market funds D. bond funds
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