Financial Management - Study Mode
[#626] Firm's which helps in indirect transfer such as Merrill Lynch is classified as
Correct Answer
(A) investment banking house
Explanation
Solution: Firm's which helps in indirect transfer such as Merrill Lynch is classified as investment banking house. Investment banking is a specific division of banking related to the creation of capital for other companies, governments, and other entities.
[#627] In Corporation characteristics, losses are subject to funds invested actually is considered as
Correct Answer
(A) limited liability
Explanation
Solution: In Corporation characteristics, losses are subject to funds invested actually is considered as limited liability. Limited liability is a type of legal structure for an organization where a corporate loss will not exceed the amount invested in a partnership or limited liability company. In other words, investors' and owners' private assets are not at risk if the company fails.
[#628] Government spending, if it exceeds federal government tax revenues then it is classified as
Correct Answer
(D) budget deficit
Explanation
Solution: Government spending, if it exceeds federal government tax revenues then it is classified as budget deficit. A budget deficit is a financial loss for during a period where expenses exceed revenues. This concept is often used in business but more commonly used to refer to governmental spending in excess of revenues collected.
[#629] Financial security with low degree risk and investment held by businesses is classified as
Correct Answer
(D) money market mutual funds
Explanation
Solution: Financial security with low degree risk and investment held by businesses is classified as money market mutual funds. A money market mutual fund (MMF) is a type of mutual fund that invests in high-quality, short-term debt instruments, cash, and cash equivalents.
[#630] Type of financial security in which firms do not borrow money rather lease their assets is classified as
Correct Answer
(A) leases
Explanation
Solution: Type of financial security in which firms do not borrow money rather lease their assets is classified as leases. A lease is a contract outlining the terms under which one party agrees to rent property owned by another party.