Alco Electronics Needs to Borrow Money to Pay for a Large

question 121

Multiple Choice

Alco Electronics needs to borrow money to pay for a large capital investment. It is deciding between getting a bank loan and issuing bonds. Which statement is true about the options Alco is considering?

• A) A bank loan is part of a loanable funds market, but issuing bonds is not.
• B) A bank loan is borrowing from many savers, while issuing bonds is not.
• C) A bank loan is borrowing a large amount from one lender, while issuing bonds is borrowing small amounts from many lenders.
• D) Issuing bonds is part of the loanable funds market, but a bank loan is not.

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Definitions:

Invention

The creation of a new product, process, or idea that did not exist before.

Technological Advance

The introduction of new technologies or the improvement of existing ones, leading to more efficient production processes or better products.

Invention

An invention is the creation of a new product, process, or idea that has not been made before, offering novel solutions to problems.

Innovation

The process of translating an idea or invention into a good or service that creates value or for which customers will pay.