What Is the Most Fundamental Purpose of the "Capital Market

question 69

Multiple Choice

What is the most fundamental purpose of the "capital market"?

• A)To connect the savings decisions of households with the borrowing decisions of firms.
• B)To provide the means by which firms can acquire physical capital.
• C)To provide the means by which households and firms can invest financial capital.
• D)To connect firms and households who wish to borrow with financial institutions.
• E)To connect households who wish to borrow with banks who wish to lend.

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Definitions:

Functional Risk

The potential for a product or service to fail to perform its intended function, leading to dissatisfaction or harm.

Physical Risk

The potential for bodily harm or health hazards that individuals may face in various activities or environments.

Social Risk

Social risk in consumer behavior refers to the potential for a product or service to adversely affect the user's social standing, image, or relationships with others.

Psychological Risk

The potential for a product or service to evoke negative emotional states or threaten one's self-concept.