Which of the Following Is Not One of the Eight

question 1

Multiple Choice

Which of the following is not one of the eight basic facts about financial structure?

• A) Debt contracts are typically extremely complicated legal documents that place substantial restrictions on the behavior of the borrower.
• B) Indirect finance, which involves the activities of financial intermediaries, is many times more important than direct finance in which businesses raise funds directly from lenders in financial markets.
• C) Collateral is a prevalent feature of debt contracts for both households and businesses.
• D) New security issues is the most important source of external funds to finance businesses.

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Definitions:

Norm of Reciprocity

A social norm stating that if someone does something for you, you then feel obligated to return the favor.

Negotiation

A process by which two or more parties seek to reach an agreement or resolve a dispute through dialogue and compromise.

Soft Influence Tactics

Subtle or indirect methods used to persuade or guide others' behavior, relying on personal appeal and attractiveness rather than coercion.

Compliance

is the act of conforming to or following rules, standards, or laws.