Which of the following statements is most correct? A borrower\'s long-term debt

Question

Which of the following statements is most correct? A borrower's long-term debt typically has a higher interest rate than its shortterm debt. Debt that is infrequently traded (less liquid) typically has a lower interest rate than similar but highly traded debt. Variable (floating) rate debt is more prevalent when long-term borrowing rates are low. Variable (floating) rate debt should never be used by healthcare providers because it is too risky. Fixed interest rate debt is more prevalent when long-term borrowing rates are high.

Explanation / Answer

Answer:

Option A is the most correct answer. Because a the larger the term of debt the higher is the risk involved ans thus the higher is the rate of interest.

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