Which of the following would be consistent with a hedging (maturity matching) approach to financing working capital? a. Financing seasonal needs with long-term funds. b. Financing some long-term needs with short-term funds. c. Financing short-term needs with short-term funds. d. Financing short-term needs with long-term debt.
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This helps to minimize the risk of being unable to repay the financing when it becomes due. a. Financing seasonal needs with long-term funds - This would not be consistent with a hedging approach as long-term funds have a longer maturity than seasonal needs. b. Show more…
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