Which of the Following Statements Is Correct

question 18

Multiple Choice

Which of the following statements is correct?

• A) An IPO is an example of a primary market transaction.
• B) Money markets are subject to wider price fluctuations and are therefore more risky than capital market instruments.
• C) A direct transfer of funds is more efficient than utilizing financial institutions.
• D) The market segmentation theory argues that the different investors have different risk preferences which determine the shape of the yield curve.

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Definitions:

Real Terms

Adjusting financial figures to account for inflation, to reflect the actual purchasing power.

Tax Rate

The percentage at which an individual or corporation is taxed, which can vary based on income level, type of income, and jurisdiction.

Deflation

A decrease in the general price level of goods and services, often indicating an economy in decline.

Farmers

Individuals engaged in agricultural activities, aimed at producing food and other crops.