Firms often finance temporary assets with short$-$term debt because

Question $4$ options:

Matching the maturities of assets and liabilities means, generally, that cash will be coming in at about the same time that it is needed to service the debt.

Short$-$term interest rates have traditionally been more stable than long$-$term interest rates.

Firms that borrow heavily on a long$-$term basis are more likely to be unable to repay their debts than firms that borrow on a short$-$term basis.

The yield curve has traditionally been downward sloping.

The sales of such firm are generally relatively constant over the year, and thus their financing requirements are also relatively stable.