Capital Structures Based on Book and Market Values Are Generally

question 135

Multiple Choice

Capital structures based on book and market values are generally different because:

• A) market values of securities change all the time.
• B) market values reflect the cost of capital already spent.
• C) market values of securities are reflected on company books.
• D) market values reflect the prices at which the securities are sold.

---

Definitions:

Consumer Price Index

A measure that examines the weighted average of prices of a basket of consumer goods and services, such as transportation, food, and medical care, typically used as an indicator of inflation.

Unemployment Rate

The percentage of the labor force that is jobless and actively seeking employment, used as a key indicator of the labor market's health.

Disinflation

A decrease in the rate of inflation, indicating a slowdown in the rate at which prices for goods and services rise.

Structural Unemployment

Unemployment that occurs as a result of restructuring within industries, often brought on by advances in technology, as opposed to changes in market supply or demand.