With Regard to External Sources of Financing for Nonfinancial Businesses

question 22

Multiple Choice

With regard to external sources of financing for nonfinancial businesses in the United States,which of the following are accurate statements?

• A) Direct finance is used in less than 5% of the external financing of American businesses.
• B) Only large, well-established corporations have access to securities markets to finance their activities.
• C) Loans from banks and other financial intermediaries in the United States provide five times more financing of corporate activities than do stock markets.
• D) All of the above.
• E) Only A and B of the above.

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Definitions:

Continuous Probability Distributions

Mathematical functions that represent the probabilities of all possible continuous outcomes for a random variable.

Bernoulli Distribution

A probability distribution of a random variable that takes the value 1 with probability 'p' and the value 0 with probability '1-p'.

Pareto Distribution

A probability distribution used to describe phenomena in the natural and social sciences where a small proportion of occurrences leads to a large proportion of outcomes.

Lognormal Distribution

A continuous probability distribution of a random variable whose logarithm is normally distributed.