Banks

question 22

Multiple Choice

Banks

• A)play a role in creating an asset that people can use as a medium of exchange.
• B)are financial intermediaries,but mutual funds are not financial intermediaries.
• C)are financial markets,as are bond markets.
• D)All of the above are correct.

---

Definitions:

Pre-tax Earnings

The amount of income earned before taxes have been deducted.

Bond Issue

The process by which a corporation or government raises funds by selling bonds to investors.

Debt Financing

Raising capital through the sale of bonds, bills, or notes to individuals or institutional investors, in exchange for lending money to the borrowing entity.

Equity Financing

The process of raising capital through the sale of shares in a company, thereby giving investors ownership interests.