Which of the Following Statements Is CORRECT

question 91

Multiple Choice

Which of the following statements is CORRECT?

• A) Although short-term interest rates have historically averaged less than long-term rates, the heavy use of short-term debt is considered to be an aggressive strategy because of the inherent risks associated with using short-term financing.
• B) If a company follows a policy of "matching maturities, " this means that it matches its use of common stock with its use of long-term debt as opposed to short-term debt.
• C) Net working capital is defined as current assets minus the sum of payables and accruals, and any decrease in the current ratio automatically indicates that net working capital has decreased.
• D) If a company follows a policy of "matching maturities, " this means that it matches its use of short-term debt with its use of long-term debt.
• E) Net working capital is defined as current assets minus the sum of payables and accruals, and any increase in the current ratio automatically indicates that net working capital has increased.

---

Definitions:

Optimism

A mental attitude characterized by hope and confidence in success and a positive future.

Hardiness

A personality trait characterized by a sense of control over events, commitment to life and work, and the courage to face stressful situations.

African Americans

A racial or ethnic group in the United States with ancestors from Africa, particularly those of Sub-Saharan African descent.

Native Americans

The indigenous peoples of the United States, including both the mainland and the non-contiguous territories.