Lenders normally feel that the relative risk associated with short-term debt is ____ the risk associated with long-term debt.

Question

Quizplus · Accepted Answer

Lenders typically view short-term debt as less risky than long-term debt because short-term debt is usually tied to a specific purpose and paid off within a shorter time frame, reducing the likelihood of default. Long-term debt, on the other hand, is subject to greater uncertainty and market fluctuations, making it riskier.

Lenders Normally Feel That the Relative Risk Associated with Short-Term