________ Offers Financially Stable Corporations a Technique to Raise Short-Term

question 210

Multiple Choice

________ offers financially stable corporations a technique to raise short-term funds by issuing unsecured promissory notes to the general public with the promise of repayment within 270 days.

• A) Trade credit
• B) A line of credit
• C) Factoring
• D) Commercial paper

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Definitions:

Diversified Away

The reduction of risk in an investment portfolio by allocating investments among various financial instruments, industries, and other categories to minimize the impact of any single asset or risk.

Perfectly Negatively Correlated

This refers to a relationship between two variables where one variable increases as the other decreases with a correlation coefficient of -1.

Portfolio's Risk

The overall risk associated with holding a portfolio of investments, considering how the risks of the individual investments affect the portfolio as a whole.

Stand-alone Risk

Stand-alone risk refers to the risk associated with investing in a single asset or project, without considering the diversity or portfolio effects.