Which of the Following Statements Is CORRECT

question 32

Multiple Choice

Which of the following statements is CORRECT?

• A) The New York Stock Exchange is an auction market with a physical location.
• B) Capital market transactions involve only the purchase and sale of equity securities, i.e., common stocks.
• C) If an investor sells shares of stock through a broker, then this would be a primary market transaction.
• D) Consumer automobile loans are evidenced by legal documents called "promissory notes," and these individual notes are traded in the money market.
• E) While the distinctions are blurring as investment banks are today buying commercial banks, and vice versa, investment banks generally specialize in lending money, whereas commercial banks generally help companies raise capital from other parties.

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Definitions:

Productive Capacity

The maximum output or production level that can be achieved with the available inputs and resources without stressing the production system.

Direct Method

A method for presenting cash flows related to operating activities, highlighting the main categories of gross cash inflows and outflows.

Operating Activities

Activities that are directly related to the operation of the business, such as sales, services, and administrative tasks, distinguishing them from investing and financing activities.

Economic Benefits

Inflows of assets or reductions in liabilities that result in an increase in equity, other than those relating to contributions from equity participants.