Financing That Matures in One Year or Less and Has

question 59

Multiple Choice

Financing that matures in one year or less and has specific assets pledged as collateral is called

• A) spontaneous financing.
• B) unsecured short-term financing.
• C) secured short-term financing.
• D) none of the above.

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Definitions:

Annual Return

The annual return is the percentage change in an investment's value over a year, accounting for dividends, interest, and capital gains.

Present Value Factors

Multipliers used to determine the present value of a future sum of money or stream of cash flows given a specific discount rate.

Hurdle Rate

The minimum return rate on an investment required by an investor or manager, often used in capital budgeting.

Internal Rate

Short for Internal Rate of Return (IRR), a metric used in capital budgeting to estimate the profitability of potential investments.