Money Markets Would Include Which of the Following Securities

Companies that have higher risk than a competitor in the same industry will generally have: A) to pay a lower interest rate than its competitors. B) a higher relative stock price than its competitors. C) a lower cost of funds than its competitors. D) to pay a higher interest rate than its competitors.

The financial markets allocate capital to corporations by: A) reflecting expectations of the market participants in the corporation's share price. B) requiring higher returns from companies with lower risk than their competitors. C) rewarding companies with expected high returns with lower relative stock prices. D) relying on the opinion of investment dealers.