CFA Practice Question
Which of the following are secondary sources of liquidity?
II. Negotiating debt contracts
III. Liquidating assets
IV. Short-term investment portfolios
I. Trade credit
II. Negotiating debt contracts
III. Liquidating assets
IV. Short-term investment portfolios
Correct Answer: II and III
User Contributed Comments 4
| User | Comment |
|---|---|
| johntan1979 | Trade credit is the largest use of capital for a majority of B2B sellers in the US and is a critical source of capital for a majority of all businesses. Good example is Wal-Mart: trade credit for Wal-Mart is 8 times the amount of capital invested by shareholders. |
| melmay11 | Thanks Johntan1979 for the context! |
| ibrahim18 | Secondary sources of liquidity affect daily operations. |
| jabiller | Credit was frozen or taken away by banks during the Financial Crisis of 2008. CFO's everywhere were trying to figure out how to make payroll because we live in a credit world. You may have had a credit card that actually lowered your limit to borrow during this time period. |