Which of the Following Would Most Likely Discourage Investment

question 33

Multiple Choice

Which of the following would most likely discourage investment?

• A) an increase in the selling price of a firm's output
• B) a reduction in the selling price of corporate stock
• C) an increase in bond prices
• D) a reduction in the rate of inflation
• E) an increase in the optimal capital stock

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Definitions:

TSX

The Toronto Stock Exchange, which is the largest stock exchange in Canada, trading Canadian securities.

Dealer Market

A financial market mechanism in which buyers and sellers execute transactions through dealers who buy and sell for their own accounts.

Over-the-counter

Financial transactions conducted directly between parties outside of formal exchanges.

Secondary Market

The secondary market is where investors buy and sell securities they already own, such as stocks and bonds, to other investors or traders, after the initial issuance in the primary market.