Asked by Sofiya Hoyda on Apr 29, 2024
Verified
Which of the following statements is true?
A) Nearly all of the money that flows into the stock market goes directly to the corporation issuing the stock and ends up as new plant and equipment.
B) New stock offerings and initial public offerings raise is extremely rare and usually is spent on advertising.
C) Nearly all of the money that flows into the stock market buys stock that has already been issued.
D) Bondholders lend money to a company and are therefore owners rather than creditors.
Stock Market
The stock market is a collection of markets where stocks (shares of ownership in businesses) are bought and sold, reflecting the economic health of a country.
Corporation
A legal entity recognized by law as a separate entity from its owners, capable of holding assets, borrowing money, and being sued.
Bondholders
Individuals or entities that hold debt securities typically issued by corporations or governments, entitling them to repayment of principal plus interest.
- Comprehend the principle of investment in economic jargon, covering both net and gross investment.
Verified Answer
ZK
Zybrea KnightMay 04, 2024
Final Answer :
C
Explanation :
This statement is true as most of the money in the stock market is invested in existing stocks rather than new stock offerings. Options A, B, and D are all incorrect.
Learning Objectives
- Comprehend the principle of investment in economic jargon, covering both net and gross investment.