Which of the Following Can Be Described as Involving Direct

question 56

Multiple Choice

Which of the following can be described as involving direct finance?

• A) A corporation's stock is traded in an over-the-counter market.
• B) People buy shares in a mutual fund.
• C) A pension fund manager buys commercial paper in the secondary market.
• D) An insurance company buys shares of common stock in the over-the-counter markets.
• E) None of the above.

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Definitions:

Interest Rate

is the cost of borrowing money, expressed as a percentage of the principal, that lenders charge borrowers or the rate earned on deposits.

Expected Returns

Expected returns are the anticipated profit or loss from an investment, reflecting the potential financial gains or risks based on historical data and market trends.

Investment Demanded

Investment demanded refers to the total amount of spending by businesses and individuals on capital goods like machinery, buildings, and technology, to increase future productivity.

Interest Rate

The percentage of a sum of money charged for its use, often expressed as an annual percentage.