An aggressive, risk-oriented firm will likely
A) borrow long-term and carry low levels of liquidity.
B) borrow short-term and carry low levels of liquidity.
C) borrow long-term and carry high levels of liquidity.
D) borrow short-term and carry high levels of liquidity.

Question

Quizplus · Accepted Answer

An aggressive, risk-oriented firm will likely borrow short-term and carry low levels of liquidity. The firm is willing to take on more risk and may therefore prefer to borrow at a lower cost with shorter maturity to take advantage of potential opportunities. Low levels of liquidity allow the firm to invest in higher risk, higher return projects.

An Aggressive, Risk-Oriented Firm Will Likely