Which of the following statements concerning external sources of financing for nonfinancial businesses in Canada is true?
A) Issuing marketable securities is the primary way that they finance their activities.
B) Bonds are the least important source of external funds to finance their activities.
C) Stocks are a relatively unimportant source of finance for their activities.
D) Selling bonds directly to the Canadian household is a major source of funding for Canadian businesses.

Question

Quizplus · Accepted Answer

According to Statistics Canada, nonfinancial businesses in Canada primarily rely on loans as their main source of external financing. Stocks are a relatively minor source of funding compared to loans, and bonds also play a significant role in financing their activities but are less important than loans. Therefore, option C is the most accurate statement. Option A is incorrect because marketable securities are not the primary financing option for nonfinancial businesses, and option B is incorrect because bonds are a significant source, just not the most important one. Option D is also incorrect because Canadian households are not a major direct source of funding for businesses through bond purchases.

Which of the Following Statements Concerning External Sources of Financing