Asked by Marissa Gonçalves on Jun 03, 2024
Verified
The financing of short-term assets with short-term debt is known as:
A) Relative cash funding.
B) Restrictive financing.
C) Seasonal funding.
D) Flexible financing.
E) Maturity hedging.
Maturity Hedging
A financial strategy used to manage the risk associated with the timing of cash flows, particularly the mismatch between asset maturities and liability maturities.
Short-Term Assets
Assets expected to be converted into cash or used up within one year or an operating cycle, whichever is longer.
Flexible Financing
A financing approach that offers various adaptable payment options to meet the differing financial needs and situations of borrowers.
- Apply knowledge of short-term financial policies to real-world scenarios.
Verified Answer
ZK
Zybrea KnightJun 06, 2024
Final Answer :
E
Explanation :
Maturity hedging involves matching the maturities of assets and liabilities to reduce risk, which in this context means financing short-term assets with short-term debt.
Learning Objectives
- Apply knowledge of short-term financial policies to real-world scenarios.