When a firm's funding is a mixture of short-term and long-term debt issues,it is carrying out:
A) asset management.
B) liability diversification.
C) securitisation management.
D) asset diversification.

Question

Quizplus · Accepted Answer

Liability diversification refers to the practice of raising funds through a combination of short-term and long-term debt issues to reduce the firm's exposure to interest rate risk and ensure financial stability. Asset management refers to the management of a firm's assets to maximize their value and returns. Securitisation management refers to the process of converting illiquid assets into securities that can be traded in financial markets. Asset diversification refers to the practice of spreading out investments across a range of different asset classes to reduce the risk of loss.

When a Firm's Funding Is a Mixture of Short-Term and Long-Term