Which of the following are reasons why a person may want to warehouse liquidity?
I. protect against total loss
II. ability to exploit future opportunities
III. capitalize on the high rates of return available on cash
IV. protect against the need to disturb the existing portfolio
A) I and II only
B) I, II and IV only
C) II, III and IV only
D) I, II, III and IV

Question

Quizplus · Accepted Answer

Warehousing liquidity allows individuals to protect against total loss and the need to disturb their existing portfolio, as well as to exploit future opportunities. Capitalizing on high rates of return available on cash is not typically a reason for warehousing liquidity, as liquidity often involves holding assets in forms that are readily accessible but do not offer high returns.

Which of the Following Are Reasons Why a Person May