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  3. 15. company a has a cash ratio of 0.25 and company

15. Company A has a cash ratio of 0.25 and Company B has a cash...

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15. Company A has a cash ratio of 0.25 and Company B has a cash ratio of 0.72. Also, company A's stock is traded at an average daily volume of 100 million shares and with a bid-ask spread of 1 cent. Company B's stock is traded at an average daily volume of 5 million shares and with a bid-ask spread of 5 cents. Which of the following is most likely to be true? A) Company A is stock is more liquid than company B's. B) Company B's market liquidity is higher than company A's. C) Company A has greater short-term solvency therefore more liquid. D) Company A's stock has relative higher transaction cost, E) Company A can increase its market liquidity by holding more liquid assets. 16. Disbursements float: A) occurs when a deposit is recorded but the funds are unavailable. B) causes the book balance to exceed the bank balance. C) has tended to decrease the net float of the firm D) is a recommended source of funds for short-term investments. E) is generally more desirable to companies than collection float

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