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Chapter 14 Theory of Financial Structure

Chapter 14 Theory of Financial Structure - Chapter 14...

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Chapter 14 Theory of Financial Structure 14.1 Multiple Choice Questions 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) loans from other financial intermediaries. Answer: B 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, corporate bonds and commercial paper 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. 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 percent of newly issued corporate bonds and commercial paper have been sold directly to American households. C) The stock market accounted for a sizeable fraction of the financing of American businesses in the 1970-1996 period. D) All of the above. E) Only (A) and (B) of the above. Answer: E 6) With regard to external sources of financing for nonfinancial businesses in the
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United States, which of the following are accurate statements? 7) (I) In the United States bank 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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