Which Statement Is Correct

question 82

Multiple Choice

Which statement is correct?

• A)Firms should generally finance all of their assets with long-term debt.
• B)Firms that follow restrictive financial policies can generally avoid short-term debt financing.
• C)Short-term borrowing is generally more expensive than long-term borrowing.
• D)Long-term interest rates tend to be more volatile than short-term rates.
• E)A firm is less apt to face financial distress if it adopts a flexible financial policy rather than a restrictive policy.

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Definitions:

Internet

A global network of interconnected computers that allows users to share information and communicate across long distances instantaneously.

Fixed-Alternative

Offers limited options from which a choice can be made, often used in context with questionnaires, polls, or decision-making scenarios where respondents pick from a pre-defined set of answers.

Likert Scale

A psychometric scale commonly used in surveys to measure respondents' attitudes, opinions, or perceptions by providing a range of answering options from strongly agree to strongly disagree.

Dichotomous

Refers to something divided or dividing into two sharply distinguished parts or classifications.