In the Context of Various Funding Options for Small Businesses

question 97

Multiple Choice

In the context of various funding options for small businesses, which of the following statements is a difference between angel investors and venture capital firms?

• A) Angel investors fund only nonprofits, whereas venture capital firms do not fund nonprofits.
• B) Angel investors include private organizations, whereas venture capital firms include only government organizations.
• C) Angel investors focus on start-ups in their later stages, whereas venture capital firms focus on low-potential start-ups.
• D) Angel investors are wealthy individuals, whereas venture capital firms are companies.

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Definitions:

Strike Price

The set price at which the holder of an options contract can buy (in a call option) or sell (in a put option) the underlying security or commodity.

Freddie Mac

Freddie Mac, short for the Federal Home Loan Mortgage Corporation, is a government-sponsored enterprise in the United States that provides a secondary market in home mortgages by purchasing mortgage loans from the lenders.

Ginnie Mae

A government-owned corporation within the United States Department of Housing and Urban Development that guarantees principal and interest payments on mortgage-backed securities.

Mortgage Market

The market where lenders and borrowers come together to negotiate and arrange home loans, encompassing both primary and secondary market activities.