Which of the Following Statements Is FALSE

question 39

Multiple Choice

Which of the following statements is FALSE?

• A)By relying on short-term debt the firm exposes itself to funding risk,which is the risk of incurring financial distress costs should the firm not be able to refinance its debt in a timely manner or at a reasonable rate.
• B)An ultra-conservative policy would involve financing even some of the plant,property,and equipment with short-term sources of funds.
• C)With a conservative financing policy,the firm would use short-term debt very sparingly to meet its peak seasonal needs.
• D)Short-term debt can have lower agency and "lemons" costs than long-term debt,and an aggressive financing policy can benefit shareholders.

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Definitions:

Pelagic

Referring to oceanic water not close to the bottom or shore, encompassing the entire water column used particularly in context to the life and ecosystems found within this vast, open ocean area.

Biodiversity

The variety and variability of life forms within a given ecosystem, region, or the entire Earth, crucial for maintaining ecological balance.

Trawl Fishing

A method of fishing that involves dragging a large net through the water, either at midwater or along the sea bottom.

Ocean Floor Ecosystems

Diverse habitats found on the ocean floor, ranging from deep sea vents to coral reefs, supporting a wide variety of life forms.