Working capital management involves optimizing:

A Only cash

B Current assets and current liabilities to balance liquidity and profitability

C Only inventory

D Long-term debt only

✓ Correct Answer: Option B

Working capital management: balance between sufficient liquidity and minimizing the cost of holding current assets.

💡 Why is B) the correct answer?

The correct answer to the question "Working capital management involves optimizing:" is Option B: Current assets and current liabilities to balance liquidity and profitability.

The other options — A) Only cash, C) Only inventory, D) Long-term debt only — are incorrect for this CFA Exam Prep question. As explained above: Working capital management: balance between sufficient liquidity and minimizing the cost of holding current assets.

📚 About This CFA Exam Prep Practice Question

This 2-level CFA Exam Prep question from the Corporate Finance topic is part of BrainForge Quiz's free exam preparation library. Each question includes the correct answer and a detailed explanation to help you understand the underlying concept, not just memorize the answer.

How to use this page: Read the question above, consider all four options (A through D), then check the highlighted correct answer and explanation. For active timed practice, start a free CFA Exam Prep practice test or use flashcards for spaced repetition review.

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Working capital management involves optimizing:

✓ Correct Answer: Option B

📚 About This CFA Exam Prep Practice Question

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