Ch7 - Financial Markets and Institutions 7e(Mishkin Chapter...

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Financial Markets and Institutions, 7e (Mishkin) Chapter 7 Why Do Financial Institutions Exist? 7.1 Multiple Choice 1) Of the following sources of external finance for American nonfinancial businesses, the least important is A) loans from banks. B) stocks. C) bonds and commercial paper. D) nonbank loans. Answer: Question Status: Previous Edition 2) Of the following sources of external finance for American nonfinancial businesses, the most important is 3) Of the sources of external funds for nonfinancial businesses in the United States, bonds account for approximately ________ of the total. 4) Of the sources of external funds for nonfinancial businesses in the United States, stocks account for approximately ________ of the total.
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5) With regard to external sources of financing for nonfinancial businesses in the United States, which of the following are accurate statements? A) Marketable securities account for a larger share of external business financing in the United States than in most other countries. B) Since 1970, less than 5% of newly issued corporate bonds and commercial paper have been sold directly to American households. C) The stock market accounted for the largest share of the financing of American businesses in the 1970-2000 period. D) All of the above. E) Only A and B of the above. 6) With regard to external sources of financing for nonfinancial businesses in the United States, which of the following are accurate statements? 7) (I) In the United States, nonbank loans are the most important source of external funds for nonfinancial businesses. (II) In Germany and Japan, issuing stocks and bonds is the most important source of external for nonfinancial businesses.
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