Why Do Firms Generally Choose to Finance Temporary Net Operating

Multiple Choice

Why do firms generally choose to finance temporary net operating working capital with short-term debt?

A) Matching the maturities of assets and liabilities reduces risk.
B) Short-term interest rates have traditionally been more stable than long-term interest rates.
C) A firm that borrows heavily on a long-term basis is more apt to be unable to repay the debt than a firm that borrows short term.
D) The yield curve has traditionally been downward sloping.