Finance companies generally:Question 6Select one:a.issue shares and use the proceeds to buy bonds.b.raise funds in financial markets to lend to households and companies.c.raise funds from banks to lend to households and companies.d.issue bonds and use the proceeds to buy shares.

The financing activities of a firm involve the acquisition of funds from investors and creditors to start or sustain a business operation.Select one:TrueFalse

If a bank needs to raise the amount of capital relative to assets, a bank manager might choose to A. sell securities the bank owns and put the funds into the reserve account. B. pay higher dividends. C. borrow more reserve from the Central Bank. D. issue more shares.

A company issuing corporate bonds is utilizing which source of finance?Answer areaa) Equity financingd) Internal financingb) Short-term financingc) Debt financing

Many firms that need funds borrow from financial institutions or individuals called: A. debtors. B. creditors. C. collateral. D. joint ventures. E. investors.

Which of the following best describes a finance company?Question 7Select one:A mutual fund managed by a financial intermediary that specialises in investing in short-term debt instrumentsA financial institution that sells unsecured notes and uses the funds to make loans to household borrowers and companiesA financial institution whose function is to provide cash income for employees of corporations or governments after they retireA financial institution that pools funds for individuals and then invests them in both the money and capital marketsA financial institution that aims to achieve high investment returns on its invested funds by using exotic financial products