A Rising Stock Market Index Due to Higher Share Prices

question 22

Multiple Choice

A rising stock market index due to higher share prices

• A)increases people's wealth,but is unlikely to increase their willingness to spend.
• B)increases people's wealth and as a result may increase their willingness to spend.
• C)decreases the amount of funds that business firms can raise by selling newly-issued stock.
• D)decreases people's wealth,but is unlikely to increase their willingness to spend.

---

Definitions:

Ownership

The act, state, or right of possessing something.

Financing Condition

A provision that stipulates specific financial conditions that must be met for a transaction to proceed.

Voting Preferred Stock

A type of preferred stock that grants holders the right to vote on certain corporate matters, typically in addition to receiving fixed dividend payments.

Pool Funds

Combining resources or capital from multiple investors to form a larger investment fund, often managed professionally, allowing for diversified investments and shared risks.