Question

On basis of time period, the different sources of funds can be categorized into _____ categories.

• A. Two
• B. Three
• C. Four
• D. Five

Answer 1

Answer: (B)

Three

Sources of funds can be classified into three categories on the basis of the duration of the financing available. They are :

Long-term sources: These are for a long period of time, exceeding 5 years.

Medium- term sources : These are for a medium period of time, i.e more than a year and less than 5 years.

Short- term sources: These are for a short period of time, i.e not exceeding one year.