Financial Management - Study Mode

[#716] Bonds issue by corporations which are more risky than preferred stocks are classified as
Correct Answer

(C) common stocks

Explanation

Solution: Common stock is a form of corporate equity ownership, a type of security.

[#717] Federal Reserve policy and federal surplus or deficit of budget affect the
Correct Answer

(B) cost of money

Explanation

Solution: Federal Reserve policy and federal surplus or deficit of budget affect the cost of money. The Federal Reserve System is the central banking system of the United States of America. The Federal Open Market Committee (FOMC) sets monetary policy.

[#718] Market where market makers keep record of stock of financial instruments is classified as
Correct Answer

(B) dealer market

Explanation

Solution: Market where market makers keep record of stock of financial instruments is classified as dealer market. A dealer market is a financial market mechanism wherein multiple dealers post prices at which they will buy or sell a specific security of instrument.

[#719] An unlimited liability for business debts and less capital for growth are limitations of
Correct Answer

(A) proprietorship

Explanation

Solution: An unlimited liability for business debts and less capital for growth are limitations of proprietorship. Since the owner takes all the profits, he must also accept full personal responsibility for all the losses, even to the extent of his personal possessions.

[#720] Transfer through institutions such as mutual funds or banks are classified as
Correct Answer

(B) financial intermediary

Explanation

Solution: Transfer through institutions such as mutual funds or banks are classified as financial intermediary. A financial intermediary is an entity that acts as the middleman between two parties in a financial transaction, such as a commercial bank, investment banks, mutual funds and pension funds.