The Distinguishing Feature of a Well-Functioning Financial Market Is the

question 8

Multiple Choice

The distinguishing feature of a well-functioning financial market is the

• A)continual increase in the liquidity of most assets.
• B)continual reduction in the riskiness of most assets.
• C)increased ease of converting common stocks into bonds.
• D)incorporation of available information into asset prices.

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Definitions:

Manufacturer

A type of business or company that produces finished goods from raw materials in large quantities for sale.

Present Value

The present worth of a future amount of money or series of cash flows, considering a certain interest rate.

Future Lease Payments

The amounts due over the lease term for the use of an asset.

Salvage Value

The estimated value that an asset will realize upon its sale at the end of its useful life.