A Firm in Need of Short-Term Financing Will Most Likely

question 58

True/False

A firm in need of short-term financing will most likely turn to the global money market instead of the global capital market.

---

Definitions:

Capital Asset Pricing

A model that describes the relationship between the expected return of an investment and the risk, or beta, relative to the market.

Systematic Risk

The risk inherent to the entire market or market segment, which cannot be mitigated through diversification.

Security Market Line

A representation in financial markets of the relationship between risk and expected return, used in the Capital Asset Pricing Model.

Overpriced Security

A security trading at a price believed to be higher than its theoretical value or intrinsic worth.