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Commerce · Q326

Business Finance

Graduate and Post Graduate · Commerce · question 326

Q326

If a firm moves from a 'conservative' working capital policy to an 'aggressive' policy, it should expect

A.
Liquidity to decrease, whereas expected profitability would increase
B.
Expected profitability to increase, whereas risk would decrease
Answer
C.
Liquidity would increase, whereas risk would also increase
D.
Risk and profitability to decrease

Answer: Option B

Solution

Answer: Option B
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