Financial Markets Have the Basic Function of

question 11

Multiple Choice

Financial markets have the basic function of

• A)getting people with funds to lend together with people who want to borrow funds.
• B)assuring that the swings in the business cycle are less pronounced.
• C)assuring that governments need never resort to printing money.
• D)providing a risk-free repository of spending power.

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Definitions:

Consolidated Shareholders' Equity

Represents the total equity interest in a company, including common stock, preferred stock, retained earnings, and accumulated other comprehensive income, as shown in the consolidated financial statements.

Parent-Company Extension Method

A method in accounting where the parent company extends its financial statements to include the financial activities of its subsidiaries as if they are part of the parent company itself.

Consolidated Shareholders' Equity

The total amount of equity attributed to shareholders of the parent company and its subsidiaries, after eliminating intra-group transactions and balances.

Non-controlling Interest

Non-controlling interest is a portion of the equity in a subsidiary not owned directly or indirectly by the parent company, representing minority shareholders' interest in the subsidiary's net assets.