Which one of the following statements is correct?

Answer

	a.	Most firms tend to finance inventory with long-term debt.
	b.	A flexible financing policy tends to increase the risk of encountering financial distress.
	c.	Short-term interest rates are generally higher than long-term rates.
	d.	Seasonal needs are financed externally when firms adhere to a flexible financing policy.
	e.	Long-term interest rates tend to be less volatile than short-term rates.