Which of the Following Best Describes the Use of Credit

question 121

Multiple Choice

Which of the following best describes the use of credit cards?  

• A) They have eliminated the use of money. 
• B) They are included in the narrow definition of money, M1. 
• C) They are near-money. 
• D) They are a way of postponing the payment of money.

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Definitions:

Conversion Premium

The additional cost over the current market value of a convertible security that an investor pays to have the option to convert it into a set number of shares.

Conversion Price

The predetermined price per share at which a convertible bond or preferred stock can be converted into common stock.

Current Price

The market value of a stock, bond, or commodity at which it can be bought or sold at a particular time.

Conversion Ratio

The number of shares an investor gets for converting a convertible security into common stock.