A firm's asset or capital requirements grow over time and usually exhibit temporal (seasonal) variation. Firms must solve the challenge of how to finance their assets with a combination of short- and long-term financing. The following graph exhibits this relationship for a particular firm. DOLLARS Long-term Financing Asset Requirements TIME Which of the following best characterizes this firm's policy of financing assets? O Restricted policy O Relaxed policy O Moderate policy Note the shaded region on the preceding graph. Which of the following statements best describes the firm's situation during this time? O The firm has excess capital to invest in cash or marketable securities. The firm must rely on short-term borrowing