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© 2014 Pearson Canada Inc.#
Of the sources of external funds for nonfinancial businesses in Canada, stocks account for
approximately ____ of the total.
A) 2 percent
B) 12 percent
C) 20 percent
D) 40 percent
Answer: B
Diff: 3 Type: MC Page Ref: 162
Skill: Recall
Objective List: 8.1 Depict how asymmetric information results in adverse selection and moral
hazard
Which of the following statements concerning external sources of financing for nonfinancial
businesses in Canada is true?
A) Stocks are a far more important source of finance than are bonds.
B) Stocks and bonds, combined, supply less than one-half of the external funds.
C) Financial intermediaries are the least important source of external funds for businesses.
D) Since 1970, more than half of the new issues of stock have been sold to Canadian households.
Answer: B
Diff: 2 Type: MC Page Ref: 162
Skill: Recall
Objective List: 8.1 Depict how asymmetric information results in adverse selection and moral
hazard
Which of the following statements concerning external sources of financing for nonfinancial
businesses in Canada is true?
A) Issuing marketable securities is the primary way that they finance their activities.
B) Bonds are the least important source of external funds to finance their activities.
C) Stocks are a relatively unimportant source of finance for their activities.
D) Selling bonds directly to the Canadian household is a major source of funding for Canadian
businesses.
Answer: C
Diff: 2 Type: MC Page Ref: 162
Skill: Recall
Objective List: 8.1 Depict how asymmetric information results in adverse selection and moral
hazard