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Topic
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A company evaluating the advantages and disadvantages of short-term and long-term financing options would note which of the following two characteristics to be true?
Short-term Financing Long-term Financing
a. Decreased interest rate risk Increased credit risk
b. Increased interest rate risk Increased credit risk
c. Increased interest rate risk Decreased credit risk
d. Decreased interest rate risk Decreased credit risk
The answer is c. I understand short-term financing increased interest rate risk. I dont understand why long-term financing decreased credit risk. Can any one help? Thanks
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