4. Current asset financing policies Aa Aa E Firms manage a variety of current assets. Permanent current assets are necessary for firms to maintain their businesses, and they will be carried even through downturns in business cycles. Temporary current assets fluctuate seasonally or with business cycles. Firms must devise a financing strategy that best fits their business situation and that best manages their risk. Use the following table to identify the different current asset financing policies. Description Financing Policy [ Long-term capital finances all fixed assets and the nonseasonal portion of current assets, as well as seasonal needs of current assets. Long-term capital finances some portion of the nonseasonal part | of current assets, as well as all fixed assets, and short-term loans finance all seasonal needs of current assets and the remaining portion of nonseasonal current assets Long-term capital finances all permanent assets, but short-term debt finances temporary current assets. Maturity matching approach Aggressive approach Conservative approach Suppose a firm occasionally faces demand for short-term credit but usually has an excess of short-term capital to finance current assets. Which approach is the firm following? O Conservative approach O Aggressive approach O Maturity matching approach