- CFA Exams
- CFA Level I Exam
- Topic 3. Corporate Issuers
- Learning Module 4. Working Capital and Liquidity
- Subject 3. Managing Working Capital and Liquidity
CFA Practice Question
A firm that is concerned about the time it takes for inventory to be delivered by suppliers will likely maintain ______.
B. carrying costs
C. reorder points
D. safety stocks
A. shortage costs
B. carrying costs
C. reorder points
D. safety stocks
Correct Answer: D
This firm is most likely not willing to suffer shortage costs since it is concerned about delivery time.
User Contributed Comments 2
| User | Comment |
|---|---|
| chesschh | Hence, carrying costs? |
| MathLoser | Carrying cost: Financing and holding cost. storage, capital costs, obsolescence, insurances and taxes |