Many Households Place Funds with Financial Institutions Because Many FI

question 34

Multiple Choice

Many households place funds with financial institutions because many FI accounts provide

• A)lower denominations than other securities.
• B)flexible maturities verses other interest-earning securities.
• C)better liquidity than directly negotiated debt contracts.
• D)less price risk if interest rates change.
• E)All of these.

---

Definitions:

Sustainable Growth Rate

The maximum rate at which a company can grow its earnings, dividends, and sales without having to increase its equity or take on new debt.

External Financing

Funds raised from sources outside of the company, such as loans, investors, or grants, to support business activities.

Debt-Equity Ratio

The Debt-Equity Ratio is a measure of a company's financial leverage, indicating the proportion of equity and debt used to finance a company's assets.

Capital Intensity Ratio

A financial metric indicating the amount of capital needed per unit of revenue, typically used to assess the business model's reliance on physical capital.