Aa Aa E 1. The management of liquid assets Proper working capital management requires a focus on a firm's working capita with a particular emphasis on maintaining an optimal level of cash and marketable securities. Cash and marketable securities, also called near-cash equivalents, are the most liquid of the firm's assets. The firm's maintaining sufficient cash to pay its bills when they become due is critical. However, when the firm's cash on hand and immediately expected cash inflows are insufficient to meet these obligations, having a portfolio of marketable securities that could be immediately sold reduces the firm's potential for default. Read the following statements regarding the firm's cash and marketable securities investments and determine which are true: rating and reputation that results when the firm is unable to pay its financial obligations as they become due Statement II: A negative consequence of holding too much cash is that the firm incurs an opportunity cost equal to the interest that would have otherwise been earned by an investment in marketable securities. Statement III: A negative consequence of holding too much cash and marketable securities is a reduced return on assets (ROA) and return on equity (ROE), all other things remaining constant. Statement IV: A negative consequence of holding too much cash is that the firm will be unable to take advantage of desirable and unique investment opportunities when they arise. Which of the previous statements are true? O I, II, and III Q III only Q I only O I and