Which of the Following Best Describes the Concept of Maturity

question 116

Multiple Choice

Which of the following best describes the concept of maturity matching?

• A)Companies use funds from selling stocks to fund long-term projects and funds from selling bonds to fund short-term projects.
• B)Companies try to match the term of a project with the maturity of the financing that pays for it.
• C)Companies use funds from selling bonds to fund long-term projects and funds from selling stocks to fund short-term projects.
• D)Companies always use bonds to finance both short- and long-term projects because stocks have no maturity and therefore cannot be matched to the length of projects.
• E)None of the above describes the concept of maturity matching.

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Definitions:

Fad Product

A product that experiences a rapid rise in popularity and equally rapid decline, often due to changing consumer tastes.

Life-Cycle Curve

A graph representing the stages through which a product goes from introduction to decline in the market.

Product Form

Product form refers to the physical characteristics and features of a product that distinguish it from other products in the market.

Product Class

A broad category of products that serve a similar function or are targeted at a similar market, such as electronics or personal care items.