The Appropriate Amount of Short-Term Borrowing Is Determined By

question 68

Multiple Choice

The appropriate amount of short-term borrowing is determined by:

• A)cash reserves.
• B)maturity hedging.
• C)relative interest rates.
• D)term structure.
• E)All of the above.

---

Definitions:

Conversion Ratio

The specific quantity of common shares an investor can receive for converting each unit of a convertible security, such as a convertible bond or preferred stock.

Par Value

The face value of a bond or stock, typically the amount that is paid back at maturity for bonds or a nominal dollar value assigned to shares of stock.

Coupon Bond

A type of bond that offers interest payments to the holder at specified intervals until the bond's maturity.

Accrued Interest

The interest that has accumulated on a bond or other fixed-income security since the last interest payment was made.