The Capital Market Is Notably Important Because

question 19

Multiple Choice

The capital market is notably important because

• A)if properly run, the capital market increases the growth of the economy.
• B)capital markets raise funds for net borrowers.
• C)capital markets help net borrowers achieve investment plans.
• D)All of the above are correct.

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Definitions:

Cost Method

An accounting method used to value an investment, based on the cost to acquire the asset, without recognizing post-purchase market changes.

Dividends

Payments made by a corporation to its shareholder members, usually derived from profits.

Management Fees

Charges levied by management for the operation of an investment fund, company, or another entity, usually calculated as a percentage of assets under management.

Consolidated Retained Earnings

The portion of net earnings not paid out as dividends, but retained by the company to reinvest in its core business, or to pay debt, reported in the consolidated financial statements.