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linda_us, Master's Degree
Category: Multiple Problems
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The Principle Of Hedging Calls For The Matching Of

Customer Question

Question 1. The Principle Of Hedging Calls For The Matching Of a firm’s average:
Liquidity of its assets with its liabilities and equity
Liquidity of its accounts receivable with its accounts payable
Maturities of its assets with its liabilities and equity
Maturities of its sales with its assets
2 points

Question 2. Taking advantage of unusual cash discounts or price bargains is an example of the:
Transactions motive
Precautionary motive
Speculative motive
Leverage motive
2 points

Question 3. The portion of current assets financed through long-term financing is referred to as the:
Net working capital
Current ratio
Seasonal current assets
Fixed assets
2 points

Question 4. Holding all other factors constant, if a firm increases its current assets relative to total assets,
It increases return and reduces risk.
It increases return and increases risk.
It reduces return and reduces risk.
It reduces return and increases risk.
2 points

Question 5. The objective of managing current assets and liabilities is to
Achieve as low a level of current assets as possible.
Achieve as low a level of current liabilities as possible.
Achieve a balance between profitability and risk that contributes to the firm's value.
Achieve as high a level of current liabilities as possible.
2 points

Question 6. ___________ are short-term money market investments that are extremely safe and liquid; they can be quickly converted into cash at values very close to their intrinsic values.
Preferred stocks.
Treasury bonds.
Corporate bonds.
Marketable securities.
2 points

Question 7. A firm’s excess cash balance during a particular month could be best deployed if it were
Financed with short term investments
Financed with long term investments
Invested in short term investments
Invested in long term investments
2 points

Question 8. The time between when a payee sends payment and the funds are credited to the payer’s bank account is called the:
Collection float
Disbursement float
Total float
Transmittal float
2 points

Question 9. Which of the following marketable securities is sold at a discount throughout competitive bidding in a weekly auction?
U.S. Treasury bills
Federal funds
Commercial paper
Negotiable certificates of deposit
2 points

Question 10. In the cash budget, the firm’s final sales forecast us usually a function of
Economic forecasts.
The sales force estimate of demand.
External and internal factors in combination.
Accounts payable experience.
2 points

Question 11. Net working capital is defined as:
Current assets plus current liabilities
Current assets less fixed assets
Current assets less current liabilities
Current liabilities plus long-term liabilities
2 points

Question 12. A __________________ is a claim against a customer’s inventory when the individual items are indistinguishable.
Floor plan receipt
Trust receipt
Warehouse receipt
Blanket inventory lien
2 points

Question 13. The prime rate offered by commercial banks is their _____________ rate to their ______________ quality business customers.
Highest lowest,
Lowest lowest,
Highest highest,
2 points

Question 14. Commercial banks lend unsecured short-term funds in the following three basic ways:
Commercial paper, lines of credit, and revolving credit agreements.
Single-payment note, revolving credit agreements, and commercial paper.
Single-payment note, lines of credit, and revolving credit agreements.
Commercial paper, lines of credit, and revolving credit agreements.
2 points

Question 15. Commercial finance companies:
Make riskier unsecured business loans but charge higher interest rates
Specialize in loans secured by inventories and real estate
Concentrate their lending activity to firms pledging the notes receivable of their customers
Are primarily interested in loans secured by a business customer’s accounts receivable and inventories
2 points

Question 16. Which of the following short-term sources of funds is available only to the financially strongest concerns?
Trade credit
Commercial bank loans
Finance company loans
Commercial paper
2 points

Question 17. For most lines of business the basic source of short-term loan financing is:
Commercial banks
Finance companies
The commercial paper
Market factors
2 points

Question 18. The most important form of short-term business financing is:
A revolving credit agreement
Accounts-receivable financing
Inventory loans
Trade credit
2 points

Question 19. Commercial paper issued by large U.S. corporations is backed by:
Accounts receivable
Inventories credit
Quality of the issuer
Fixed assets
2 points

Question 20. Commercial finance companies obtain loanable funds:
To a lesser extent than commercial banks through equity capital
Through both long- and short-term borrowing
From the Small Business Administration
Primarily from the sale of preferred stock

Submitted: 4 years ago.
Category: Multiple Problems
Expert:  Manal Elkhoshkhany replied 4 years ago.


Please advise your deadline.

Thank you!

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