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30 May, 00:10

The business demand for funds resulting from short-term investments is inversely related to the number of projects implemented and inversely related to the interest rate. a. True b. False

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  1. 30 May, 00:36
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    False because the interest rate depends upon the economic conditions of the country and also on the risk associated with the company, its capital structure and credit risk. Yes it does depend on the finance required to fund the projects and investments but it does not relates to the interest rate. Because provision of large amounts of funds is riskier for the lenders, plus there are many other factors like duration of loan, profitability, etc that measures the creditworthiness of the client which tells us whether or not the client is able to payback the loan along with its interest or not. So the statement is false.
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