1 | Page
MBA 662-Final Questions and Correct
Answers
In managing cash and marketable securities what should be the
manager's primary concern? Ans: Safety and liquidity
Which of the following is not a valid reason for holding cash? Ans:
• Transaction motive
• Compensating balances for banks
• Precautionary needs
• Conservation speculation
"Float" takes place because of which of the following reasons? Ans:
a lag exists between writing a check and clearing it through the
banking system.
Which of the following is not a method of speeding up collections?
Ans: • Lock-box system
• Regional collection system
Major cost savings for consumers using automated clearinghouses
is Ans: • Saving more than 1 billion in postage
• Saving time paying bills through check writing
• Security of having the payments and deposits directly deposited
or deducted from your account
© 2025 All rights reserved
, 2 | Page
Which of the following is not a factor influencing the selection of a
marketable security? Ans: · maturity
· minimum amount
· safety
· marketability
• yield
Which of the following securities typically trades on a discount
basis? Ans: treasury bills
Money market funds Ans: are short term investment accounts that
allow small investors to participate in buying large denomination
securities
The three primary policy variables to consider when extending
credit include all of the following except Ans: ◦ credit standards
◦ Terms of trade
◦ Collection policy
Which of the following is generally considered to be the least
liquid of current assets? Ans: Inventory
What is generally the largest source of short-term credit for small
firms? Ans: Trade Credit or accounts payable
What are the primary characteristics of bank loans to business
firms? Ans: ◦ Short term 1-7 years
© 2025 All rights reserved
MBA 662-Final Questions and Correct
Answers
In managing cash and marketable securities what should be the
manager's primary concern? Ans: Safety and liquidity
Which of the following is not a valid reason for holding cash? Ans:
• Transaction motive
• Compensating balances for banks
• Precautionary needs
• Conservation speculation
"Float" takes place because of which of the following reasons? Ans:
a lag exists between writing a check and clearing it through the
banking system.
Which of the following is not a method of speeding up collections?
Ans: • Lock-box system
• Regional collection system
Major cost savings for consumers using automated clearinghouses
is Ans: • Saving more than 1 billion in postage
• Saving time paying bills through check writing
• Security of having the payments and deposits directly deposited
or deducted from your account
© 2025 All rights reserved
, 2 | Page
Which of the following is not a factor influencing the selection of a
marketable security? Ans: · maturity
· minimum amount
· safety
· marketability
• yield
Which of the following securities typically trades on a discount
basis? Ans: treasury bills
Money market funds Ans: are short term investment accounts that
allow small investors to participate in buying large denomination
securities
The three primary policy variables to consider when extending
credit include all of the following except Ans: ◦ credit standards
◦ Terms of trade
◦ Collection policy
Which of the following is generally considered to be the least
liquid of current assets? Ans: Inventory
What is generally the largest source of short-term credit for small
firms? Ans: Trade Credit or accounts payable
What are the primary characteristics of bank loans to business
firms? Ans: ◦ Short term 1-7 years
© 2025 All rights reserved
