Which of the Following Statements Is False

question 38

Multiple Choice

Which of the following statements is false?

• A) Financing part or all of the permanent working capital with short-term debt is known as an aggressive financing policy.
• B) When the yield curve is downward sloping, the interest rate on short-term debt is lower than the rate on long-term debt. In that case, short-term debt may appear cheaper than long-term debt.
• C) The value of short-term debt is less sensitive to the firm's credit quality than long-term debt; therefore, its value will be less affected by management's actions or information.
• D) Permanent working capital is the amount that a firm must keep invested in its short-term assets to support its continuing operations.

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Definitions:

Local Knowledge

The understanding and insights accumulated by people living in a particular area, reflecting their experiences, history, and culture, which can be critical for effective decision-making and development efforts.

Poverty Science

A movement by economists, policy researchers, and business researchers to understand what types of activities and interventions might more effectively alleviate poverty.

Randomized Experiments

An experimental design that uses random assignment of participants to different groups to mitigate selection bias, typically considered the gold standard in research for establishing causality.

Corporate Social Responsibility (CSR)

A business model that helps a company be socially accountable to itself, its stakeholders, and the public.