If long-term credit exposes a borrower to less risk, why would people or firms ever borrow on

Question:

If long-term credit exposes a borrower to less risk, why would people or firms ever borrow on a short-term basis?

AppendixLO1

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For book-img-for-question

Fundamentals Of Financial Management Concise

ISBN: 9780324258721

4th Edition

Authors: Eugene F. Brigham, Joel F. Houston

See More Books

Question Posted: Jul 18, 2024 10:03 AM

See More Questions

If long-term credit exposes a borrower to less risk, why would people or firms ever borrow on a short-term basis?
Your end-of-semester assignment is as follows: (a) (i) read the two Economist articles entitled ?Debt is Good for You? (dated 01/25/2001) and ?Debtors? Prison? (dated 02/09/2009), which discuss the...
Why is it important for us to understand how the global system of financial institutions and markets works? ros57395_ch01.qxd 12/21/04 2:45 PM Page 1 Part 1 The Global Financial System in Perspective...
(a) Employing the intercept technique, determine the average grain size for the steel specimen whose microstructure is shown in Figure (a); use at least seven straight-line segments. (b) Estimate the...
A 1975 article in the magazine Science examined the graduate admissions process at Berkeley for evidence of gender bias. The following table shows the number of applicants accepted to each of four...
1 Does your evidence support or contradict the model?
Determining the Need for Life Insurance. Jake is a 27-year-old single man with no children. He has a younger sister who has a developmental disability. Both his parents are living, though neither...
Prepare a Statement of Revenues, Expenditures, and Changes in Fund Balance for the Broadus County Courthouse Bonds Debt Service Fund for 20X6, given the following information: Fund balance, January...
You work for a hedge fund and your job is to profit from possible arbitrages. You have the following information today from a large international bank active in the financial markets. The spot...
"Firms can control their accrued liabilities within fairly wide limits; depending on the cost of accrued liabilities, financing from this source will be increased or decreased." Discuss. AppendixLO1
From the standpoint of the borrower, is long-term or short-term credit riskier? Explain. Would it ever make sense to borrow on a short-term basis if short-term rates were above longterm rates?...
Illustrate the demand and supply curves for lemonades and show what happens to the equilibrium price and quantity in the market in the following situations. a. The price of fresh fruit juice...
Anticipating objections is very important in negotiations. For this exercise, briefly describe a policy that you would like to see implemented by the federal, state, or local government. This could...
Think about a particular community of which you have been or still are a member. Which of Gardner's eight elements of community were especially visible? Which were missing and why?
Based on the industry overview and knowledge of the situation, prioritize these issues and suggest how the CDO should address them. What steps should the CDO take to simplify the overly complex...
Although there's been a widespread increase in EHR optimization and adoption over the past 10 years, EHR alerts still fail to detect up to 33 percent of medication errors how to decompose the issue...
Our topic is Appropriate In-Person Workplace Etiquette in Canada, and teamwork is one of the essential works in Canada. So just, explain why and which rules someone should follow in teamwork in...
An engine develops 400 Nm of torque at 3700 rev/min. Find the power developed by the engine.
Solve each problem. Find the coordinates of the points of intersection of the line y = 2 and the circle with center at (4, 5) and radius 4.
On an adjustable-rate mortgage, do borrowers always prefer smaller (tighter) rate caps that limit the amount the contract interest rate can increase in any given year or over the life of the loan?...
The Civilian Bank has a balance sheet below ( the risk weights of the assets are in the parentheses ) : Assets Value ( $ million ) Liabilities and Equity Value ( $ million ) Cash 6 3 Deposits 5 2 8...
REQUIRED RATE OF RETURN Assume that the risk-free rate is 5.5% and the required return on the market is 12%. What is the required rate of return on a stock with a beta of 2?

If long-term credit exposes a borrower to less risk, why would people or firms ever borrow on

Question:

Step by Step Answer:

Fundamentals Of Financial Management Concise

Students also viewed these Business questions