Which of the Following Statements Is Most Correct

question 20

Multiple Choice

Which of the following statements is most correct?

• A)the liquidity preference theory holds that interest rates are determined by the supply of and demand for loanable funds.
• B)the loanable funds theory and the liquidity preference theory are incompatible with each other because one is right and the other is wrong.
• C)finding the yield to maturity on a corporate bond is comparable to finding the internal rate of return.
• D)the market segmentation theory holds that securities of different maturities are perfect substitutes for each other.

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Definitions:

Monthly Demand

The total quantity of a product that consumers are willing and able to purchase within a specific month.

Variable Manuf. Cost

Expenses that vary in direct relation to the amount of production, including costs like raw materials and direct labor.

Unavoidable Allocated Fixed Corporate Costs

These are fixed costs that are essential and non-avoidable, allocated across different departments or projects within a corporation.