Which of the Following Statements Is CORRECT

question 70

Multiple Choice

Which of the following statements is CORRECT?

• A) Trade credit is provided only to relatively large,strong firms.
• B) Commercial paper is a form of short-term financing that is primarily used by large,strong,financially stable companies.
• C) Short-term debt is favored by firms because,while it is generally more expensive than long-term debt,it exposes the borrowing firm to less risk than long-term debt.
• D) Commercial paper can be issued by virtually any firm so long as it is willing to pay the going interest rate.
• E) Commercial paper is typically offered at a long-term maturity of at least five years.

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Definitions:

Future Growth

Refers to the expansion and development of a business or economy over time.

Operational Control

The process of monitoring and managing day-to-day operations of a business to ensure that organizational goals are met.

Displaced Workers

Individuals who have lost their jobs due to economic changes, technological advancements, or other external factors beyond their control.

Service Risk

The possibility of experiencing losses or failures when delivering or receiving services, due to variability in service quality, delivery, or customer satisfaction.