Question: Which statement is true? a) The less liquid assets a firm holds, the less likely it is that the firm will experience financial distress. b)

Which statement is true? a) The less liquid assets a firm holds, the less likely it is that the firm will experience financial distress. b) The higher the liquidity ratios, the more liquidity risk a firm has. c) Liquid assets generate profits for the firm. d) Extremely high levels of liquidity guard against liquidity crises, but at the cost of lower returns on assets.

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