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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 #4 considered Low Profit?
A. | Because, normally, long term interests rates are higher than short term interest rates. | |
B. | Because, normally, long term interest rates are lower than short term interest rates. | |
C. | Because, normally, long term and short term interest rates are the same. | |
D. | None of the above. |
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