Which of the Following Statements Concerning External Sources of Financing

question 36

Multiple Choice

Which of the following statements concerning external sources of financing for nonfinancial businesses in the United States are TRUE?

• A)Stocks are a far more important source of finance than are bonds.
• B)Stocks and bonds,combined,supply less than one-half of the external funds.
• C)Financial intermediaries are the least important source of external funds for businesses.
• D)Since 1970,more than half of the new issues of stock have been sold to American households.

---

Definitions:

Unit Elastic

Describes a situation in which the percentage change in quantity demanded or supplied is equal to the percentage change in price, resulting in no change in total revenue.

Total Revenue

The total income generated by a firm from the sale of its goods and services.

Price Elasticity

An index that measures the reaction of how much a good is wanted to a price adjustment of that good.

Midpoint Formula

A mathematical formula used to calculate the average or midpoint between two values on a line segment.