All Other Things Being Equal, a Policy of Financing Its

question 76

Multiple Choice

All other things being equal, a policy of financing its assets with a relatively ____ proportion of short-term debt will tend to ____ the variability (or risk) of the after-tax earnings of the firm.

• A) large; decrease
• B) small; increase
• C) constant; lower
• D) large; increase

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Definitions:

Principles

Foundational rules or laws that guide actions, behavior, or thought processes in various disciplines or aspects of life.

Intuitions

The ability to understand something instinctively, without the need for conscious reasoning.

Morning Morality Effect

This term describes the phenomenon where people's moral awareness and self-control are higher in the morning, and decline over the course of the day.

Virtuous Best

Suggests the highest standard of morality and ethical behavior.