Which of the Following Is Likely to Be a Primary

question 86

Multiple Choice

Which of the following is likely to be a primary financial market transaction?

• A) You cash the check your grandmother sent you for your birthday.
• B) You call a broker and purchase bonds for your retirement fund.
• C) A city issues bonds to finance new road construction.
• D) A supermarket needs to borrow the funds for a second location and takes out a loan from a commercial bank to pay for it.

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Definitions:

Accounts Receivables

Money owed to a company by customers who have purchased goods or services on credit.

Insolvent

The state of being unable to pay off debts as they come due, having liabilities exceed assets.

Receivables

Money owed to a business or an individual for goods or services provided on credit.

Cash-to-cash Cycle

The time period between when a business pays for its inventory and when it receives cash from the sale of that inventory.