1. The primary disadvantage of relying on short-term credit for continuous financing needs is:
a. the risk of increasing interest rates
b. the higher interest rates relative to long-term rates
c. the time it takes to arrange for it as compared to long-term financing
d. banks don’t like to lend short-term
2. Issuing new bonds to replace old bonds is called:
a. a refunding operation
b. a provisional call
c. a serial redemption
d. a sinking fund redemption