Which of the Following Two Forms of Business Financing Describe

question 107

Multiple Choice

Which of the following two forms of business financing describe borrowed funds and ownership funds, respectively?

• A) debt; equity
• B) credit; leverage
• C) equity; debt
• D) equity; leverage

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Definitions:

Bid and Ask Prices

The bid price is the highest price a buyer is willing to pay for a security, while the ask price is the lowest price a seller is willing to accept.

Bid-Ask Spread

The difference between the highest price that buyers are willing to pay for an asset and the lowest price that sellers are willing to accept.

Commission Income

Revenue earned by an individual or company for facilitating a transaction or service, often a percentage of the transaction value.

Price Continuity

The concept that securities should have consistent pricing through time without large gaps or discontinuities.