10. The risk of higher interest expense for firms that maximize short-term debt refers to:

a. Default risk

b. Refinancing risk

c. Interest rate risk

d. Current asset aggressiveness risk

9. Which of the following best describes the speculative motive for cash holdings? Cash is held to:

a. Enable the firm to remain liquid despite unforeseen shocks to operating cash flow

b. Shield the firm from the monitoring provided by capital markets

c. Enable the firm to make strategic investments as they arise

d. Meet recurring financial obligations when they are due

8. Which of the following best describes the precautionary motive for cash holdings? Cash is held to:

a. Enable the firm to remain liquid despite unforeseen shocks to operating cash flow

b. Shield the firm from the monitoring provided by capital markets

c. Meet recurring financial obligations when they are due

d. Enable the firm to make strategic investments as they arise