Which of the Following Statements Is Incorrect

question 66

Multiple Choice

Which of the following statements is incorrect?

• A)Financial markets attract funds from investors and channel the funds to corporations.
• B)Money markets enable corporations to borrow funds on a short-term basis so that they can support their existing operations.
• C)Financial institutions serve solely as intermediaries with the financial markets and never serve as investors.
• D)Investors seek to invest their funds in the stock of firms that are presently undervalued and have much potential to improve.

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Definitions:

Competitive Market

A market structure characterized by a large number of buyers and sellers, free entry and exit, and products that are close substitutes, leading to price competition and efficiency.

Output

The quantity of goods or services produced by a company, industry, or country within a specific period.

Economic Inefficiency

A situation in which resources are not used in the most effective way, leading to potential losses in productivity or value.

Consumer Preferences

The specific desires, likes, and dislikes that influence the purchasing behavior of consumers.