IBODI Risk Management Guidelines

It reduces liquidity risk but also reduces profit due to greater financing costs.

Cash

To provide the highest expected ROI while managing risk.

<p>Liquidity risk due to low working capital position.</p> Signup and view all the answers

<p>Matching the maturities of obligations to the income (cash flow) generating characteristics of the assets financed.</p> Signup and view all the answers

<p>It is less liquid and ties up funds that could be used elsewhere.</p> Signup and view all the answers

<p>A Moderate policy is a balance between Relaxed and Restricted policies.</p> Signup and view all the answers

<p>They are very liquid and provide a low-risk return.</p> Signup and view all the answers

<p>To ensure that the firm has sufficient liquid assets to meet its short-term obligations.</p> Signup and view all the answers

<p>To manage and mitigate the risks associated with working capital investments.</p> Signup and view all the answers