If a Firm Uses Only Short-Term Debt to Finance the Fluctuating

question 26

Multiple Choice

If a firm uses only short-term debt to finance the fluctuating level of current assets, the firm is said to be using the ____ approach to asset financing.

• A) aggressive
• B) moderate
• C) matching
• D) conservative

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Definitions:

Utility Function

A mathematical representation that shows the relationship between an individual’s consumption bundle and their level of satisfaction or utility.

Flood Insurance

A policy that covers property damage and loss caused by flooding.

Utility Function

A utility function represents a consumer's preference for a set of goods and services, showing satisfaction levels for different consumption bundles.

Stock Market

A public market for the trading of company stock and derivatives at an agreed price; it is a key component of the economy.