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Asset Liquidity Financing Plan Low Liquidity High Liquidity Short Term 1 High Profit High Risk Long Term 4 Low Profit Low Risk Why is Box

Asset Liquidity

Financing Plan

Low Liquidity

High Liquidity

Short Term

1

High Profit

High Risk

Long Term

4

Low Profit

Low Risk

Why is Box #1 considered High Profit?

Because short term interest rates are normally higher than long term interest rates.

Because short term interest rates are normally lower than long term interest rates.

Because short term interest rates and long term interest rates are normally the same.

None of the above

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