The current asset financing policy that calls for matching the maturities of assets with the maturities of liabilities is known as the __________ a. permanent current ratio approach b. temporary net working capital approach C. conservative approach d. self-liquidating approach e. aggressive approach
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- Choose when the profit is earned as a result of financial capital maintenance from the options below. a. Opening Fixed Assets > Opening Liabilities b. Closing Assets >Closing Liabilities c. Closing Net Assets >; Opening Net Asset d. Closing Assets > Current LiabilitiesBuying assets that yield a return greater than the minimum acceptable hurdle rate is a part of which core principles of Finance. a. Financing principle b. Investment principle c. Dividend principle d. Cost principleSelect the investment accounting approach with the correct valuation approach: Not Held-for-Collection Held-for-Collection a. Amortized cost Amortized cost b. Fair value Fair value c. Fair value Amortized cost d. Amortized cost Fair value
- Explain the meaning of the terms working capital and working capital management in a succinct manner. Explain the link between current asset policy and liquidity, profit, and risk as well as any other relevant information. Which policy, in your opinion, is the best?What does it mean to adopt a maturity matching approach to financing assets, includingcurrent assets? How would a more aggressive or a more conservative approach differ fromthe maturity matching approach, and how would each affect expected profits and risk? Ingeneral, is one approach better than the others?What have been the possible reasons for the changes in Return of Equity (ROEs )? •Decompose the ROE into the main components: ROA and EM (Equity Multiplier) •Analyse the sources of Return of Asset (ROA) : Asset Utilisation (AU) and Profit Margin ratios.(PM) •Identify the sources of the changes in Asset Utilisation and Profit Margin
- Which of the following statements is not true as regards to matching strategy? a. all assets should be financed with permanent long-term capital. b. temporary current assets should be financed with temporary working capital c. permanent current assets should be financed with permanent working capital. d. long-term assets should be financed from long-term capital.Working Capital Management is concerned with management of Select one: a. Long term capital b. Current Assets c. Profits d. Fixed AssetsWhich of the following are the key factors when determining asset allocation for an investment? I. Time an investor has until he needs to use the money from the investment (time horizon) II. Risk preferences (tolerance for risk) III. Current financial situation a. I., II., & III. b. I. & III. c. II. & III. d. I. & II.
- Advantages and Disadvantages of 1. Other Investment Assets 2. Alternatives to Fixed Income and Equities10 The following are the Asset and Liabilities Management (ALM) strategies except:* A. Attract loans to meet investment supply B. Attract loans to meet deposit supply C. Attract funds to meet loan demand D. Adopt a mixed approach in order to match the maturity of liablities with the maturity structure of assets.explain the unique characteristics of the asset class, their associated risks and potential returns. Foreach asset class, you should use one or two examples to support your explanation. Asset Class Characteristics Risk Potential Returns ExampleCash Products Fixed Income Equities CurrenciesDerivatives