Which of the Following Statements Is CORRECT

question 6

Multiple Choice

Which of the following statements is CORRECT?

• A) The NYSE does not exist as a physical location.Rather it represents a loose collection of dealers who trade stock electronically.
• B) An example of a primary market transaction would be your uncle transferring 100 shares of Walmart stock to you as a birthday gift.
• C) Capital market instruments include both long-term debt and common stocks.
• D) If your uncle in New York sold 100 shares of Microsoft through his broker to an investor in Los Angeles,this would be a primary market transaction.
• E) While the two frequently perform similar functions,investment banks generally specialize in lending money,whereas commercial banks generally help companies raise large blocks of capital from investors.

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Definitions:

Net Income

The amount of revenue left over after all expenses and taxes have been deducted.

Variable Costing

Variable costing is an accounting method in which only variable production costs (direct materials, direct labor, and variable manufacturing overhead) are included in the cost of goods sold, with fixed overhead expenses treated as period costs.

Variable Overhead

The overhead costs that fluctuate with the level of production activity, such as utilities and materials used in production.

Product Costs

The costs directly associated with the production of goods, including materials, labor, and manufacturing overhead.