In the Late 2000s, the Primary Source of External Funds

question 13

Multiple Choice

In the late 2000s, the primary source of external funds for corporations was

• A)commercial paper.
• B)loans.
• C)bonds.
• D)stocks.

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Definitions:

Fully Informed

A state or condition where all relevant information is known to all parties involved.

Security-market Line

A graphical representation of the relationship between expected return and beta (systematic risk) of an investment.

Capital-market Line

A line on a graph representing the rates of return for efficient portfolios that optimally balance risk and return, based on the risk-free rate and the market portfolio.

Capital-allocation Line

A line on a graph that represents the risk-and-return profiles of risky assets, showing the possible combinations of risk and return that are available.