Which of the Following Does Not Take Place in the Direct

question 92

Multiple Choice

Which of the following does not take place in the direct finance market?

• A)Ownership in corporations is sold in the form of common stock.
• B)Deposits from savers are accumulated and loans made to borrowers.
• C)Ownership in corporations is sold in the form of preferred stock.
• D)Corporate bonds are sold to savers.

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Definitions:

Accounting Profit

The net income a company reports on the financial statements, calculated by subtracting total expenses from total revenues.

Economic Profit

The variance between what a business earns in total and what it spends, counting both actual expenses and notional costs.

Efficient Output

The level of production where the maximum possible output is achieved with the given resources and technology, minimizing waste and cost.

Firm

A business organization, such as a corporation, partnership, or sole proprietorship, that sells goods or services in exchange for money.