Financial Markets Are Used for Trading

question 61

Multiple Choice

Financial markets are used for trading:

• A)Both real assets and financial assets.
• B)The goods and services produced by a firm.
• C)Securities, such as shares of IBM.
• D)The raw materials used in manufacturing.

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Definitions:

Unrealized Loss

A decrease in the value of an investment that has not yet been sold for cash.

Trading Investments

Assets that a company holds primarily for the purpose of selling them in the near term to generate income.

Subsidiary Company

A company that is controlled by another company, known as the parent company, through majority ownership or significant influence.

Investee Company

A company in which an investor holds a significant interest but not controlling stake.