When Financial Managers Are Asked the Key Reason for Choosing

question 49

True/False

When financial managers are asked the key reason for choosing short-term rather than long-term debt,they often say that they try to match the maturities of the firm's assets and liabilities.

---

Definitions:

Mental Set

A psychological tendency to approach situations in a certain way based on previous experiences and context, which can sometimes inhibit problem-solving.

Functional Fixedness

A mindset that limits an individual's use of an object to its conventional purpose alone, inhibiting their capacity for innovation and solving challenges.

Functional Fixedness

A cognitive bias that limits a person's ability to use an object only in the way it is traditionally used, hindering problem-solving.

Functional Fixedness

A cognitive bias that limits a person to using an object only in the way it is traditionally used, hindering the ability to see alternative uses or solutions.