What is maturity matching approach (for short-term financing)?

Q: Short term financing includes which of the following:

A: A company needs financial capital to carry out its various projects and thereby by increase the…

Q: What are some of the risks involved in short-term vs. long-term financing ?

A: Financing refers to providing or borrowing capital so as to run the operations of the business…

Q: Explain how to classify working capital according to its “components” and according to “time” (i.e.,…

A: Working capital is the capital of excess of current assets over current liabilities. Working capital…

Q: State the advantages of long-term debt financing.

A: Long Term Debt Financing: It refers to the debt financing required by the firm which usually has a…

Q: Explain risk-free interest rate (the nominal short-term rate)

A: The Capital Asset Pricing Model describes the relationship between the projected return for assets…

Q: What is meant by Short-term financing?

A: Finance refers to the study of money , currency as well as the capital assets.There are basically…

Q: Define Long-term financing.

A: Finance is needed by business and corporations to keep the day to day activities efficiently going.…

Q: Identify some macroeconomic factors that influence interest rates and explain theeffects of each.

A: Following are the macroeconomic factors that influence interest rates: GDP An ascent in GDP will…

Q: Which Interest Rate do we use in comparing different financing options?

A: The question is based on the concept of interest rate , which is used in comparing financing…

Q: Estimating liquidity needs involves: A. forecasting the level of future loan commitments and…

A: Liquidity is the need of funds

Q: Explain Current maturities of long-term debt.

A: Current maturities of long-term debt (CMLTD): It refers to such short-term obligations of the…

Q: What does maturity matching mean, and what is the advantage of this financingpolicy?

A: Maturity matching or hedging approach: It is a working capital financing system where we fund short…

Q: Define self-liquidating approach (for short-term financing)

A: A self-liquidating loan (or self-liquidating offer) is a sort of short-or middle of the road term…

Q: What will be Effects of Changes in Capital Market Conditions on “Going-In” Cap Rates?

A: Answer: Going in cap rates teaches investors regarding the dividend they receive on the purchased…

Q: how to Compare Different Financing Options

A: The question is based on the concept of financing options and its comparison.

Q: a) What is the similarity between the internal rate of return of a project and the yield-to-maturity…

A: Bond is a debt instrument issued by companies and government. It is a fixed income instrument which…

Q: What security provides a good estimate of the long-term nominalrisk-free rate?

A: Risk-free Rate is the estimation of the rate that is earned on the securities or the investments…

Q: Explain the concept of cointegration with examples from Finance where cointegration between a set of…

A: Finance is a vast field and involves the study of a financial or monetary system and various…

Q: a) What is the similarity between the internal rate of retum of a project and the yield-to-maturity…

A: An investor make investments in securities and bonds with a purpose of earn long term return. When…

Q: What are the effects of Borrowing on Project Cash Flows?

A: Cash flows are the cash generated from the operation of the business organisation. In other words,…

Q: Describe the advantages of different methods of short-term debt financing.

A: Short Term Debt is also referred to as current liabilities.These are the financial obligations of…

Q: Comparison of Financing Alternatives?

A: MEANING Alternative financing is a means of obtaining capital outside of the traditional banking…

Q: What is the Relationship between Changes in Interest Rates, Investor Returns, and “Going-In”Cap…

A: The question is based on the concept of relation between change in interest rate and its impact on…

Q: Which of the maturity lengths between the bonds, bills, and notes would be most advantageous during…

A: Bear market is the market condition when it drops off 20% or more than market average. It occurs…

Q: When is a project in Need for an External Interest Rate?

A: When net cash flow that is generated by the project during the project’s life is reinvested, then…

Q: How are interest rate risk and reinvestment raterisk related to the maturity risk premium?

A: The maturity risk premium is the premium for the hazard created amid an asset's life by conceivable…

Q: Explain the Leverage and the Incremental Cost of Debt with example?

A: Leverage – Leverage is a financial term it means using the debt for their financial needs and…

Q: type of liabilities: Trade and other payables  defination ?…

A: Current liabilities In accounting, current liabilities are often classified as all liabilities of…

Q: Compare and contrast short and long-term financing.  Which business activities would necessitate…

A: Short Term Finance means sourcing for the financial requirements for a short period of time. Short…

Q: Define conservative approach (for short-term financing)

A: Companies which adopt a conservative approach to manage their working capital can reduce their short…

Q: State the disadvantages of long-term debt financing.

A: Long term debt refers to the debt that has a maturity period of more than 1 year.They are also…

Q: Explain risk-free interest rate (the nominal long-term rate)

A: The rate at which an additional amount that a borrower pays to the lender over the borrowing amount…

Q: Define aggressive approach (for short-term financing)

A: The aggressive approach is a high-risk strategy of working capital financing wherein short-term…

Q: I. What is the present value of cash outflow for each of the two financing options, using the…

A: Evaluation of Project which is to be financed through bank loan or it has to be taken on lease.…

Q: What differentiates a Total Return Swap (TRS) from a Loan Portfolio Swap (LPS)?

A: Swap-  A swap is an agreement between two counterparties to exchange financial instruments or…

Q: Debt crisis  and solutions?

A: To run the business, corporations have to borrow the funds which will be repaid later with…

Q: What are the advantages and disadvantages ofusing short-term debt as a source of financing?

A: Short-term debt: It is a kind of debt that is repaid in a small span of time or within a year. The…

Q: Describe the hedging (maturity matching) approach to financing and the advantages/disadvantages of…

A: Matching or hedging approach:  This approach matches assets and liabilities to maturities.…

Q: Compare short-term and long-term investment strategies.

A: Investment strategies can be defined as those strategies which consist of various methodologies and…

Q: Explain with example the Yield to Maturity?

A: A bond is a financial instrument that is issued by the government and the corporate to raise the…