Although short-term interest rates have historically averaged less than long-term rates, the heavy use of short-term debt is considered to be an aggressive current operating asset financing strategy because of the inherent risks of using short-term financing.

Question

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The statement is true. Although short-term interest rates have historically been lower than long-term rates, relying heavily on short-term debt for financing current operating assets is seen as aggressive due to the risks involved in using short-term financing.

Although Short-Term Interest Rates Have Historically Averaged Less Than Long-Term