Which One of the Following Statements Is Correct

question 88

Multiple Choice

Which one of the following statements is correct?

• A)Firms should generally finance all of their assets with long-term debt.
• B)Firms that follow restrictive financial policies can generally avoid short-term debt financing.
• C)Short-term borrowing is generally more expensive than long-term borrowing.
• D)Long-term interest rates tend to be more volatile than short-term rates.
• E)A firm is less apt to face financial distress if it adopts a flexible financial policy rather than a restrictive policy.

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Definitions:

Customer

A person or organization that buys products or services from a company.

Continuous Variables

Variables that can take on an infinite number of values within a given range.

Example

An example is a specific case or instance used to illustrate or explain a rule, concept, or situation, helping to clarify or exemplify a particular point.

Probability

The measure of the likelihood that an event will occur, quantified as a number between 0 and 1, where 0 indicates impossibility and 1 indicates certainty.