Which of the Following Statements Is Most Correct

question 45

Multiple Choice

Which of the following statements is most correct?

• A)the liquidity preference theory holds that interest rates are determined by the supply of and demand for loanable funds.
• B)the loanable funds theory and the liquidity preference theory are incompatible with each other because one is right and the other is wrong.
• C)finding the yield to maturity on a corporate bond is comparable to finding the internal rate of return.Marketable U.S.securities are mainly sold through dealers and have interest payments that are federally taxable. Not in chapter---replace with new distracter.
• D)the market segmentation theory holds that securities of different maturities are perfect substitutes for each other.

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Definitions:

Withdrawals

Amounts of money taken out from a business by its owners for personal use.

Revenue Accounts

The financial accounts that track the income generated from a company's normal business operations, such as sales or service charges.

Income Summary

The income summary is a temporary account used during the closing process that contains the sums of all revenues and expenses for the period to calculate the net income or loss.

Net Income

The final financial gain of a firm once it has subtracted expenses and taxes from its revenue.