Which of the following statement is correct concerning the Pecking order theory? Group of answer choices Equity financing is preferred over internal cash. Debt financing is preferred over equity financing. Debt financing and equity financing is equally preferred. Debt financing is preferred over internal cash.
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Which of the following statement is correct concerning the Pecking order theory?
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- It is more provident that equity financing is more favored because of the ultimate risks associated within the cost of accumulating debt in terms of paying principal plus interest. Group of answer choices True FalseCompare and contrast financing with debt vs. equity. What is being financed?Which of the following is the function of the financial market ? Select one : a . It decides the interest rate b . It makes loan available c . It channels funds from lenders - savers to borrowers - spenders D. None of these
- How Liquidity coverage ratio (LCR) & Net stable funding ratio (NSFR) can ensure the liquidity of bank , explain with some example.Which of the following assets would be considered least liquid? Group of answer choices A savings account A checking account An interest-paying checking account A money market mutual fund Series EE US savings bondsDecreasing the amount of liquid assets held for the purpose of meeting loan demands and deposit withdrawals and increasing the usage of deposit and nondeposit sources of funds paying market rates of interest is known as: a. leverage adjustment b. liability management c. liquidity management d. liquidity adjustment
- Illustrate with a diagram the flow of funds from lenders to borrowers in a financial system. Diagram must include: Savers Borrowers Financial markets Function of the financial intermediaries Function of the financial markets Direct finance Indirect financeExplain the roll of debt and equity markets in the economy. How do they interact with both Primary and Secondary Markets? What roles do debt and equity markets and primary and secondary markets play in the “flow of funds?”Which of the following is not a main core function of the financial system?a. Provide a payments system for the exchange of goods and services.b. Provide mechanisms to separate funds for smaller-scale investmentc. Provide the channels to transfer funds and economic resources across industriesd. Provide ways to manage uncertainty and mitigate risk According to the market segmentation theory of the term structure,a. the interest rate for bonds of one maturity is determined by the supply and demand for bonds of that maturity.b. bonds of one maturity are not substitutes for bonds of other maturities; therefore, interest rates on bonds of different maturities do not move together over time.c. investors' strong preference for short-term relative to long-term bonds explains why yield curves typically slope downward.d. only A and B of the above. Costs associated with the correspondent bank process include:a. Interestb. Currency conversion spreadc. Reputation costsd. Payroll costs
- Which of the following statements are true?I. Money markets are used to facilitate the transfer of short-term funds from individuals, corporations, or governments with excess funds to those with deficient funds. Even investors who focus on long-term securities tend to hold some money market securities because this enables them to maintain liquidity.II. Financial institutions manage their liquidity by participating in money markets. They may issue moneymarket securities when they experience cash shortages and need to boost liquidity. They can also sell holdings of money market securities to obtain cash.III. The value of a money market security represents the future value of the present cash flows generated by that security. Since money market securities represent debt, their expected cash flows are typically known.IV. The pricing of money market securities changes in response to a shift in the required rate of return by investors. The required rate of return changes in response to…Which type of financial market is more prevalent: direct finance vs indirect finance. What are the factors behind the prevalence?Ratios that indicate relationships between deposits, borrowed funds and equity in financing loans and investments are called* Efficiency ratios Leverage ratios Liquidity ratios Profitability ratios Risk ratios