Which of the following is true of stocks?

Question

Quizplus · Accepted Answer

Stocks are securities that represent ownership in a corporation and their value is determined by the market demand and supply, hence it is subject to fluctuation over time. Option A is incorrect as stocks are not included in the narrow definition of money, which only includes currency (notes and coins) and demand deposits. Option C is incorrect as stocks do not minimize the physical transfer of checks or currency. Option D is partially true as stocks can be considered near-monies as they can be easily converted into cash but not as much as other near-monies like money market mutual funds. Option E is incorrect as stocks do not defer payment for a transaction using a demand deposit.

Which of the Following Is True of Stocks