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.

Question

Quizplus · Accepted Answer

Choice A is accurate as marketable securities, such as stocks and bonds, account for a larger share of external business financing in the United States than in most other countries.
Choice B is accurate as most newly issued corporate bonds and commercial paper are sold indirectly to American households through intermediaries such as mutual funds, rather than directly to households.
Choice C is not accurate as the stock market did not account for the largest share of financing for American businesses in the 1970-2000 period. Therefore, only choices A and B are accurate, making E the best choice.

With Regard to External Sources of Financing for Nonfinancial Businesses