Which of the Following Statements About the Characteristics of Debt

question 67

Multiple Choice

Which of the following statements about the characteristics of debt and equity is FALSE?

• A)They can both be long-term financial instruments.
• B)They can both be short-term financial instruments.
• C)They both involve a claim on the issuer's income.
• D)They both enable a corporation to raise funds.

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Definitions:

Clayton Act

Passed by Congress in 1914 to strengthen the Sherman Act and clarify the rule of reason, the act outlawed specific monopolistic behaviors such as tying contracts, price discrimination, and unlimited mergers.

HHI

Herfindahl-Hirschman Index (HHI) is a measure of market concentration, calculated by squaring the market share of each firm competing in the market and then summing the resulting numbers.

Relevant Market

The specific subset of the broader market where competition occurs, determined by factors like product substitutability and geographic boundaries.

Vertical Mergers

A type of merger between companies in the same industry but at different stages of production or distribution processes.