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M2. Considering that $8000 is a 2-year certificate deposit here. All short-term deposits fall under the M2 criteria.
What is a balance sheet?
A financial statement that lists a company's assets, liabilities, and shareholder equity at a certain point in time is referred to as a balance sheet.
The foundation for calculating investor return rates and assessing the capital structure of a company is provided by balance sheets.
The balance sheet is a financial statement that gives a quick overview of the assets and liabilities of a firm as well as the amount of shareholder investment.
When doing basic analysis or calculating financial ratios, balance sheets can be utilized in conjunction with other crucial financial data.
A company's balance sheet gives a quick snapshot of its financial situation at any one time. On its alone, it cannot provide an understanding of the tendencies manifesting over a longer time frame. This calls for a comparison of the balance sheet to those from earlier periods.
According to our question-
The boxes are M1 and M2.
Larry has $25,000 in the market right now.
Megan has $8,000 in an 8% earning certificate of deposit.
Felix, I have a roll of quarters.
Circulation of money, traveler's checks, and the balance of the transaction account are used to determine M1.
M2 is the sum of M1 and other deposits such as short-term, long-term, and money market funds.
First illustration: M1 and M2. because funds are constantly being transferred from the bank to the laundry. This is M1's state, and M2's scope also includes M1's state. Thus, in this circumstance, both M1 and M2 are true.
Second example: M2. Because the amount of $25,000 is an M2 money market fund, it is acceptable.
Lastly, Case M2. In light of that
Hence, M2. Considering that $8000 is a 2-year certificate deposit here. All short-term deposits fall under the M2 criteria.
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