The appropriate amount of short-term borrowing is determined by:
A)cash reserves.
B)maturity hedging.
C)relative interest rates.
D)term structure.
E)All of the above.

Question

Quizplus · Accepted Answer

The appropriate amount of short-term borrowing is determined by all of the above factors. Cash reserves help determine how much short-term borrowing is needed, maturity hedging helps determine the appropriate length of the borrowing period, relative interest rates affect the cost of borrowing, and the term structure affects the availability and cost of different types of short-term borrowing options.

The Appropriate Amount of Short-Term Borrowing Is Determined By