Firms That Use Maturity Hedging as a Guide to Financing

question 1

Multiple Choice

Firms that use maturity hedging as a guide to financing policy:

• A) try to hedge with futures contracts.
• B) hold excess cash balances to reduce risk.
• C) will finance long term assets with long term financing.
• D) rely on government policy to keep interest rates low.

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Definitions:

Mold

A type of fungus that grows in the form of multicellular filaments called hyphae, often found in damp or decaying matter.

Sneezing Fits

A series of rapid, involuntary sneezes often triggered by irritants or allergens in the nasal passages.

Itchy

A sensation that causes the desire or reflex to scratch; often associated with skin conditions, irritations, or allergic reactions.

Psychosocial Stressors

Factors in one's social and personal life that cause stress or emotional discomfort.