The Main Reason Why Banks Are the Leading Source of External

question 12

Multiple Choice

The main reason why banks are the leading source of external finance for businesses is

• A)the interest rates on bank loans are usually lower than interest rates on corporate bonds.
• B)banks have an information-cost advantage in reducing adverse selection problems.
• C)interest paid on bank loans is deductible against the corporate income tax, whereas interest paid on corporate bonds is not.
• D)government regulators encourage small businesses to obtain funding from banks.

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Definitions:

Ideal Time

The most suitable or perfect time for a particular action, event, or condition, often used in planning or scheduling for optimal outcomes.

Sensitivity

The ability of a test to correctly identify individuals who have a given disease or condition, represented as the percentage of true positives accurately identified.

Biopsy-Proven

Confirmation of a disease or condition by examining tissue samples removed from a living body.

Diagnostic Tool

An instrument or method used for identifying the nature or cause of a particular phenomenon, often related to health conditions.