If a Firm Uses Long-Term Financing to Cover Short-Term Needs

question 12

Multiple Choice

If a firm uses long-term financing to cover short-term needs it is:

• A) assuring itself of having adequate capital at all times.
• B) is taking a profitable approach to financing.
• C) is taking a relatively risky approach to financing.
• D) incurring a lower overall interest cost in comparison with short-term financing.

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Definitions:

Hellenistic

Refers to the period and culture of the Mediterranean world and Near East from the death of Alexander the Great in 323 BC to the Roman conquest of Egypt in 30 BC, noted for the spread of Greek culture and influence.

Kushan Dynasty

An empire in ancient Asia, established by the Kushans, that played a crucial role in cultural exchanges between the East and West, particularly in spreading Buddhism.

Vedas

Ancient sacred texts of Hinduism, consisting of hymns, philosophy, and guidance on ritual.

Aryans

An Indo-European ethnolinguistic group, traditionally associated with the spread of Indo-European languages and cultures in ancient times.