Which of the Following Statements Is CORRECT

question 5

Multiple Choice

Which of the following statements is CORRECT?

• A) Commercial paper is a form of short-term financing that is primarily used by large, strong, financially stable companies.
• B) Short-term debt is favored by firms because, while it is generally more expensive than long-term debt, it exposes the borrowing firm to less risk than long-term debt.
• C) Commercial paper can be issued by virtually any firm so long as it is willing to pay the going interest rate.
• D) Commercial paper is typically offered at a long-term maturity of at least five years.
• E) Trade credit is provided only to relatively large, strong firms.

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Definitions:

Proportion

A statistical measure that reflects the fraction or percentage of the total number of cases that fall within a particular category.

Statistic

A characteristic or measure obtained from a sample of data to estimate a population parameter.

Sampling Distribution

The likelihood distribution of a statistic, achieved by drawing numerous samples from a certain population.

Spread

In statistics, it refers to the range of a data set, which shows the extent to which numerical values differ from each other.